This Holiday “To Do” List Points to Higher Stocks Ahead
I can’t believe Christmas is already here…
It feels like just a few weeks ago that I was making my bold predictions for 2019 — and now it’s almost time for my 2020 predictions!
But before we jump ahead to the new year, let’s get through this holiday season first.
I don’t know about you, but I’ve got A LOT of things on my holiday “To-Do” list that need to get done before Christmas morning. I’m talking about things like…
- Pack up to drive home from our short family trip
- Wrap the aviation headsets that I bought for the kids
- Stop by the grocery store for last-minute dinner items
- Burn off some calories so I can enjoy the holiday treats!
And believe it or not, the stock market also has a “To-Do” list that it needs to complete before it moves any higher.
Except instead of these being relatively straightforward tasks like my holiday list above (disregarding the hustle and bustle of stores and malls this time of year, of course), the stock market’s “To-Do” list takes much more time and effort to get crossed off.
Let me explain…
The stock market’s “To-Do” list includes things like:
- Refocus on earnings — the single most important factor that decides stock prices
- Make sure the Fed won’t be raising rates anytime soon
- And calm trade war tensions with China
By no means are these considered easy tasks. In fact, some of these situations have been months — even years — in the making.
But today I have great news!
Over the last few days, all three of these “To Do” list items have been checked off!
Check #1: So far this holiday season, we’ve seen record spending both online and in retail stores across the country. In fact, shoppers are expected to spend over $1 trillion this holiday season — the highest amount ever recorded. That’s thanks in large part to the strong consumer confidence now that the unemployment rate is low and wages are steadily rising.
Check #2: Just a few days ago, Fed Chairman Jerome Powell announced at a press conference that the Fed expected to keep rates unchanged through 2020. This is great news as the current low rate environment encourages businesses and consumers to spend more money and invest in operations.
Check #3: Perhaps the biggest news of the month was President Trump’s announcement that U.S. and Chinese negotiators have agreed to a “phase one” trade deal between the two countries. Although this deal settled only some lower-priority obstacles, the deal did prove that both sides are serious about making a deal and are willing to compromise.
So getting back to our “To Do” list, that’s an impressive 3-for-3 on some fairly difficult obstacles that the market just overcame. And that’s great news for the bull market!
Now, there are still plenty of details to iron out — especially for the last two items on the list — but these fears are now much less of a problem than they’ve been over the course of 2019.
This frees up investors to focus on the ACTUAL data — things like the growing economy, higher corporate profits, low unemployment and higher wages — all of which point to a strong stock market.
As we’ve said all along, this is a good time to be investing. And it’s important to keep your eye on what really matters while maintaining a balanced approach.
If you took that advice, you’re probably in great shape right now.
And if you’re on the sidelines right now, it’s dangerous to be missing out on this opportunity to grow your wealth with a balanced approach to markets.
Whatever your situation, stick with The Daily Edge as we continue monitoring the stock market’s “To-Do” list while giving you the companies set to benefit most.
Now let’s get to the 5 “Must Knows” for Monday, December 23…
Must Know Stories for Monday, December 23
Happy Holidays! — The stock market will close at 1pm Eastern on Tuesday, December 24 and will be closed the entire day on Wednesday, December 25th for Christmas. In addition, trading volumes are expected to be light all week, as many traders are off for the holidays, so be sure to pay close attention to your execution prices and use limit orders if you can.
China Complies — Beijing announced that it will lower tariffs for all trading partners on 859 types of products starting January 1. Included in the cuts are frozen pork, pharmaceuticals, and high-end tech components. According to China-based think tank founder Wang Huiyao, the move is aimed to keep relations with other trading partners strong, instead of just showing preferential treatment to the U.S.
Unicorns Under Investigation — The Securities and Exchange Commission is looking into the trading activity of Slack Technologies (WORK) and several other tech “unicorns” that went public at high valuations. Although it’s currently unclear who the investigation is targeting, electronic trading firm Citadel Securities LLC was contacted last week regarding emails and messages sent just prior to Slack’s direct listing on June 20.
Facebook Hack — A security researcher is reported to have found a database with names, phone numbers, and unique user IDs of more than 267 million Facebook users earlier this month. The list was freely available online for at least 10 days beginning on December 4th. And it’s just another example of how poor Silicon Valley tech giants are at keeping our data safe. However, the market seems to have shrugged off the news as Facebook (FB) sits near all-time highs.
My “Best of 2019” Series — Stay tuned to The Daily Edge this week, as I’ll be revisiting some of our best alerts of the year. All of these are still timely when it comes to making you money — both in and out of the stock market.
Talk to you tomorrow!
Here’s to growing and protecting your wealth!