Half of the year is gone and what we have on hand is the best June since 1938 and the best S&P performance in last two decades! With S&P500 literally sitting at all time highs the most important question on Investors mind is …what next? Are we going to see a breakout or breakdown from here? Let’s take a look.
Markets are watching the G20 event this weekend with bated breath and all eyes are on Trump/Xi meeting. Will there be just smiles and handshakes or will we see a real deal? The way the Markets closed in the last few minutes indicates that hopes are high this time around. Trump, as we all know considers Stock Market performance as a barometer of his success. If nothing, at the least he would come out and say we had a good time and talks went well but the Markets are looking for something more concrete this time. Hopefully he uses his “Trump” card and seals the deal.
After G20, the spotlight will quickly shift on our Fed Chair Mr. Powell I bet he is also watching the outcome of G20 with as much interest as Wall Street. If G20 falls short to deliver then Markets will expect the Fed to be much more hawkish with the rate cut. A quarter point rate cut is already baked in and the Markets are expecting half a point in the July meeting. But some Market pundits are weighing in that with unemployment at an all time low and economy doing just fine, would the Central bank chief go all out, remains to be seen.
Whether we see a breakout or breakdown depends entirely on the above two events. Hopefully a trade war resolution is on the cards this time, if not expect fireworks on Wall Street before the July 4th! Have a great weekend.
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