RoboStreet – November 14, 2019
China Deal or No Deal Scenario Stalls Rally
The trade war with China and the hope for a signed “Phase One” deal by year-end continue to dictate the current trading landscape. Getting a done deal is the single most important issue to large market participants and it shows when major averages spike and plunge on related headlines. This week has been no different as investors try to decipher the state of trade negotiations with China, which are reportedly in question amid reports China and the U.S. aren’t seeing eye-to-eye on a tariff rollback provision.
Some key points to note are that trade hawk Director of Trade and Manufacturing Policy Peter Navarro, in a Fox Business interview last night, called WSJ reports about trade talks hitting a snag “rumor stuff” and says the U.S is on a “glide path” to a phase one agreement with China. For Mr. Navarro to go on record with these comments is in my view significant.
Countering this optimism is China’s Commerce Ministry saying China and the U.S. are holding “in-depth” trade talks and tariff cancelations is a key condition to reach a deal, which is very unpopular with the U.S. trade team as is radically lowers any leverage the U.S. has on China to enforce the terms of a trade deal. In a show of bad faith, Reuters reported suspected Chinese hackers broke into an industry group for U.S. manufacturers that have helped shape President Donald Trump’s trade policies. At the same time, China purchased five cargoes of soybeans from the U.S. this week.
China reported it lifted a ban on imports of U.S. poultry, but this move was first announced in October, so this is not new news. Economic data released Wednesday included weaker than expected growth figures from China. China’s October Industrial Production rose 4.7% yr/yr (expected 5.4%), Retail Sales increased 7.2% yr/yr (expected 7.9%), Fixed Asset Investment rose 5.2% yr/yr (expected 5.4%), and Unemployment Rate dipped to 5.1% from 5.2%. China’s GDP is in a steady decline.
In yet another highly fluid situation, Global Times reported that a curfew will be imposed in Hong Kong over the weekend, but the publication later deleted the tweet with that claim. The protests are in their sixth month and growing more violent and deadly with each and every day. The South China Morning Post reported that a U.S. Congressional commission recommended the U.S. should suspend the special economic status granted to Hong Kong if China deploys its military forces in the city.
Source: Associated Press
President Trump needs a deal as he moves into the 2020 election cycle and China’s President Xi needs a deal to avert a further economic slowdown as well as stem the capital flight by wealthy Chinese citizens. My view is that there will be a deal, but more watered down from its original form. Both sides will claim victory and the global markets will continue to trade higher.
Within our highly successful RoboInvestor Portfolio where our Winning Trades Percentage is a stunning 87.63%, we continue to book terrific profits – the most recent in KLA Corp. (KLAC) where we booked a profit of 8.06% in five weeks on half a position, with the second half position is up by 18.4%. Comparatively, the S&P 500 is ahead by 5.1% over the same timeframe.
A quick look at my Tradespoon Seasonal Chart shows KLAC has more upside in store with three out of four probability indicators (20, 30, 40-days) giving a “higher” read for the stock. This kind of high-powered always thinking AI guidance is how only trade stocks and ETFs as it gives me and RoboInvestor subscribers and incredible advantage in executing a successful and profitable portfolio.
We’ve also booked recent gains in Raytheon Corp. (RTN), Dominion Energy (D), Target Corp. (TGT) and Coca Cola (KO) in the past three weeks, making for a great start to the fourth quarter. My AI-driven RoboInvestor advisory service is poised to exceed the broad market by a wide margin heading into year’s end. At present we have 16 positions within the RoboInvestor Portfolio and I’ll be adding two more new picks next week that readers of this column should fully participate in.
Don’t get caught flatfooted in a market where headlines are dominating the direction of most stocks. Put the power of my tailor-made algorithm to work today and start making money over 87% of the time your capital is at risk in the stock market. I only trade S&P 500 stocks and the most liquid leading ETFs – like the iShares Russell 2000 ETF (IWN) that we bought on October 14 at $149.91 and the shares are trading today at $158.
I say “we bought shares” because I participate in every trade I recommend. I’m right there with you for the entire journey building wealth using the Tradespoon tools I’ve developed over the years that are only getting smarter by the day. Take a moment and join RoboInvestor and let’s cash in this holiday season in a big way!
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.
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