Market opens the week lower in the wake of a Caterpillar earnings miss and questions whether a deal with China gets done. This is the biggest week for earnings on the Q1 calendar. Roughly ¼ of the S&P companies report this week. This actually is a huge week for the world, with the Chinese trade delegation in Washington. There is an important vote on Brexit. And the Fed holds their January meeting. Despite the deal on Friday, President Trump said another government shutdown is “certainly an option” after signing a bill to temporarily reopen government following the longest shut down in history. The Market will certainly be paying attention to all of these issues. After an already 6% gain to start the year, Stocks have priced in a lot of positive outcomes. It’s resulted in an overbought situation ripe for a sell the news. California Senator Kamala Harris formally threw her hat in the ring for the White House yesterday at an event in Oakland. The 2020 Presidential campaign is gaining momentum. Expect the war of words between Republicans and Democrats to pick up, well beyond the government shutdown and the wall. It’s a long time to November 2020, but it will get here fast. This is another risk-off day, with money flowing into Bonds and Gold and out of Stocks. Oil is lower too. Fasten your seat belts. It was 7 to 1 decliners to advancers at the open.
Have a great morning,
Mike Frazier
