While investors were waiting for fireworks on the Fourth of July, they received them earlier in the week. Last week, traders spent much of their time worrying about the G20 meetings and Trump and the fate of the trade talks between China and the U.S. Those fears were abated as Trump and Chinese President Xi Jinping agreed to resume talks, as well as not add any additional tariffs. This positive news sent stocks higher for most of the week.
Despite the shortened week, the start of the new month and quarter brought plenty of metrics. Unfortunately, many of them continued to trend lower. A variety of manufacturing, housing and consumer data all showed less-than-expected results, and in a few cases contraction. Traders, however, took this as a good sign. The Federal Reserve has been pausing on its pace of hikes, and with the poor data, investors now believe that the central bank will be forced to cut rates at its next meeting. This idea continues to support stocks and the market despite the headwinds.
Investors were also looking ahead to the start of the next earnings season. With the quarter ending and the shortened holiday week, there were no stocks reporting their profits. However, the next batch of earnings reports is just around the corner, and with that, investors were hopeful that results would be poor.
All in all, the shortened week proved to be a good one for traders.
Be sure to check out our previous Wrap here, when trader’s fretted about the G20.
