Special Offer: Try the 'Tradespoon LIVE Membership' for ONLY $37!
CLICK HERE TO LEARN MORE
RoboStreet – July 5, 2018
Market Looking for Trade Concessions
U.S. stocks got off to a positive start Thursday as signs that President Trump may ease back on plans for tariffs on European cars. The U.S. could abandon threatened tariffs altogether in exchange for certain concessions. This latest tactical move by Washington is giving hope to traders that some kind of eleventh-hour intervention might provide the catalyst to stave off the $34 billion in tariffs that the U.S. and China intend to impose on each other tomorrow at midnight.
Whether the new breakthrough in European trade skirmish can translate to something meaningful regarding China is at this point very iffy with an extension of tomorrow’s deadline being the best-case scenario as I see it. If both sides agree to buy more time, it would signal that behind the scenes progress is being made and markets would respond positively. For the moment, traders are hoping the more conciliatory tone from the U.S./Europe will translate to something positive with China and the market is trading positive on that hope.
If the tariffs are on, then the U.S. will be at the outset of a technological cold war with Beijing from which there may be no turning back. If they’re off, then Wall Street will heave a sigh of relief, knowing that Trump’s trade threats will prove to be mostly bark, not bite.The stock market rally is under pressure, largely due to Trump trade war fears and I don’t suspect the market will break out of its range until there is much more clarity as to how deep and wide the trade war plays out.
China is already making other strategic moves to undermine the Trump administration effort to curb the trade deficit by taking steps to form a new 16-nation trade zone with Japan and India. It is a direct response to the vacuum left after Trump’s rejection of the 12-nation Trans-Pacific Partnership put forth by President Obama aimed at ensuring lasting U.S. influence in Asia.
And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
“As protectionism concerns increase globally, it’s important that the Asian region flies the flag of free trade,” Japanese trade minister Hiroshige Seko said at a news conference, playing up potential for a year-end agreement. Instead of major U.S. trading partners uniting against China, the U.S. is drawing fire from all sides for Trump tariffs. At this point, there just isn’t enough information to draw on in which to paint an outcome with any level of certainty and the days ahead for investors will be telling as to how the market prices in what looks to be an escalating trade war in the making.
Based on my proprietary Seasonal Charts, the market has virtually a 50-50 probability of breaking higher or lower in the next two weeks. Fundamentally strong second quarter earnings that begin to flow in next week will be a tailwind for the market as a whole while uncertainty about tariffs will act further as a deterrent for stocks. Two of the four indicators within the Seasonal Chart call for the market to trade lower and two for the market to trade higher. It stands to reason then that the S&P 500 will remain mired in a trading range for the foreseeable timeframe, which is short-term. One tweet could send stock market gapping in either direction, so we’ll let the war of words and concrete actions dictate how we trade and invest going forward.
There are however stocks within the market that we do not need to wait on. For one, the utility sector is getting a lot of attention lately as being a safe haven that is benefitting from record hot temperatures, which drives demand for electricity, lofty dividend yields, zero currency risk and immunity from global trade wars. Additionally, bond yields are tame making utilities a strong competitor for income investors seeking safety and yield.
One utility stock we added to the RoboInvestor Portfolio this week was Excelon Corp. (EXC), America’s largest power producer by megawatts sold. The stock is in a strong uptrend and trading at a new 52-week high, a feat that is eluding most stocks in the current market. With the stock paying out a 3.23% dividend yield and earnings per share set to grow by 13% in the second quarter, 14% in the third quarter, visibility for further appreciation and possible dividend increases makes EXC a strong buy on fundamentals alone.
From a technical standpoint, shares of EXC are trading 29% lower than back in 2008 when the Great Recession unfolded. So, in my view, there is plenty of upside for the stock in the weeks and months ahead and makes for a fine addition to any investment portfolio against the present volatile market landscape.
While no one can predict the outcome of the trade-related issue, as well as those variables that surround the oil markets, the dollar, and the midterm elections, there is always a bull market somewhere. RoboInvestor is just that kind of AI-directed service that spots stealth bull market stocks and ETFs that produce winner after winner when the major averages are flat or down year-to-date.
My AI platform provides the edge investors need to navigate tough markets. I invite all readers of RoboStreet to become RoboInvestors and claim their stake in our winning strategy that has produced profits in 100% of all closed positions to date, and we’re only half the way through the year. It is truly exciting posting consistent profits in a listless market. Imagine what we can do when the bulls retake the high ground.
And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
Please share this Tradespoon Market Commentary with your friends.
Comments Off on
Tradespoon Tools make finding winning trades in minute as easy as 1-2-3.
Our simple 3 step approach has resulted in an average return of almost 20% per trade!
