(Wednesday Market Open) If at first you don’t succeed…
That seems to be the attitude Wednesday, with Wall Street apparently aiming high after an early rally fizzled yesterday. Once again, ideas that trade talks with China might yield some fruit appeared to be the motivating factor, in part because of comments by President Trump and reports that China might loosen restrictions on auto imports. Trump said he might be willing to intervene in the criminal case of a top Chinese executive arrested last week if it would help reach a trade deal. That statement seems to be giving the market new hope.
Yesterday’s rally attempt got scotched for a bunch of reasons (see more below), and it’s unclear if the early strength today has more gusto. One negative overhang could be concerns about Britain. A leadership challenge to Prime Minister Theresa May seems possible, according to media reports, after she postponed voting on a Brexit measure earlier this week. Despite that, European and Asian markets all traded higher early Wednesday, and crude, gold, and U.S. Treasury yields were on the rise as well.
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A rally in tech helped bring the market out of the Monday doldrums, and some of that momentum appeared to carry into early Tuesday amid renewed optimism over trade talks with China.
After a rough week where stocks fell 4%, focus in the days ahead might turn toward monthly inflation data and congressional testimony by Fed Chair Jerome Powell. Retail sales are another metric to consider watching for possible clues on consumer sentiment.
The market wraps a volatile week with a middle-of-the road jobs report that indicated steady employment growth, but not enough to stoke inflation fears.
Despite a mid-week break in trading, the market doesn’t seem like it’s able to break its downward momentum as worries appear to continue about a possible U.S. economic slowdown and progress on the U.S.-China trade front.
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