US and china trade deal signing phase one going to happen next week. And coming week is also start of corporate business season. Experts trust that, these two things will take stock market’s race to new highs.
Stocks have been gaining steadily since it became clear late last year. The US and China reached a truce and would agree to a phase one deal, rolling back some tariffs and avoiding new ones. As always details of the deal is not clear. So markets will be focus on any information that will clarify how it will be implement and what checks and balances there are to ensure compliance.
The market has also reached a lofty premium that could be challenged if earnings disappoint, though analysts widely expect to see the majority of companies able to beat lowered expectations.
Banks are first up with J.P. Morgan Chase, Citigroup and Wells Fargo releasing earnings Tuesday, and Bank of America and Goldman Sachs reporting on Wednesday. Earnings could be a slight positive for the market, analysts say.
What Experts Says
“I think earnings are going to be a good component,” said Michael Arone, chief investment strategist, U.S. SPDR Business at State Street Global Advisors. “Companies have lowered the bar enough to where I think most of the companies will easily step over it, and we’ll all have a sigh of relief that the earnings this quarter won’t be as bad as it could have been. It won’ be strong. We’ve seen revisions across all of the sectors come down.”
According to Refinitiv, fourth quarter earnings are expect to be down 0.6%, based on results of companies that have already reported and estimates for others that have not.