What’s going on in the world…
Market opens flattish as stocks continue to stall. 2800 S&P has proven a formidable level of resistance. It’s been the case since the breakdown began in October, after hitting fresh, all-time highs in September. That translates to roughly DOW 26K. Earnings Season is all but over, showing companies are in better shape than perhaps feared in December. But challenges remain. Growth is slowing. Demand is cooling. Global trade is strained. The OECD just cut their global GDP estimate again for 2019, now down to 3.3% growth. Optimism of a deal with China seems to have been largely priced in. The details of said deal remain unclear. China announced Billions of Dollars in stimulus measures yesterday, including tax cuts and infrastructure spending needed to reduce the risk of a sharper economic slowdown. The Shanghai Composite was up nearly 2% overnight. A delay on Brexit is a real possibility. A vote will take place next week. Australia reported the slowest economic growth in 2 years, citing cooling trade with China. This is surprising, with significant implications down the road: Italy plans to join China’s Belt & Road initiative. Today is the 10-year anniversary of the intra-day low on the S&P at 666. Boy, that was such a dark and brutal time. I will never soon forget. In many ways, the wounds are still raw.
Have a great morning,
Mike Frazier
