November 15, 2019
We’ve talked about the melt-up scenario for stocks heading into the end of the year. That’s what we continue to get.
We’ve had nine new record closes over the past fifteen trading days for the S&P 500.
But remember, just six weeks ago, the bears were all excited about the weak manufacturing data — reported at the weakest level in 10 years.
I would argue that the sliding manufacturing data increased the urgency for Trump to get something done on trade, given the developments in markets and the timeline on next year’s election. China was in town for another round of negotiations and, to the surprise of many, the rumors immediately started circulating that a “limited deal” had been struck. By the end of the week, the President was in the Oval Office shaking hands with the Chinese Vice Premier on a deal (in principle).
Add to this, the weak manufacturing data also solidified another rate cut to come at the Fed’s October 30th meeting.