Trade Wars: Muted Expectations & Unknown Outcome

NYSE: SPY | SPDR S&P 500 News, Ratings, and Charts

SPY – The market (SPY) has bounced the last two sessions, but is that wise given the strong possibility the deal falls apart like it did back in late July? Get Steve Reitmeister’s take on these events along with his portfolio strategy.

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There has been a flurry of headlines this week in preparation for trade talks to commence Thursday. The sum total of these announcements is to lower the expectations for a grand deal coming together any time soon. But perhaps a smaller deal is possible.

We will discuss the run up to the trade talks and why we got more defensive Tuesday and the pros/cons of a smaller trade deal and a lot more in this week’s commentary.

Market Commentary

First, a reminder that we had our October RTR Members Only Call on Monday. Not only did I go over the market outlook, recap of the terrible ISM Manufacturing & ISM Services reports and our portfolio strategy…but then I launched a new section where I gave a review of every stock and ETF in the portfolio. You will definitely want to see that.

Watch Webinar Replay Here

Now let’s expand upon my late Tuesday trade alert to take some risk off the table coming into the 10/10 trade talks.

First, in the above Members Only Call from Monday I shared that I was leaning towards getting a touch more defensive into the talks because the risk to the downside is greater than the upside.

Second, there was a continual stream of headlines starting Sunday that showed that each side was trying to improve their negotiating posture into these talks. That is what I meant by this line from the trade alert:

There has been a lot of “tit for tat” between the US and China the last few days coming into the China trade accord.”

Now let’s spend some time getting more specific on that comment. And I will do that by sharing some of the headlines that emerged with my thoughts on each:

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The rest of the commentary is reserved for subscribers to the Reitmeister Total Return portfolio. The topics covered include:

  • Timeline of market moving headlines on China trade this past week.
  • Why specifically Steve sold 3 stocks on Tuesday afternoon bringing the portfolio down to only 50% long given concerns about the outcome of the trade talks.
  • Pros/Cons of a partial trade deal that is now being floated.
  • Contingencies for our trading strategy depending on outcome of the China trade talks.
  • Review of the key economic data from the past week including the scary showings for both ISM Manufacturing & Services.
  • Updates on 4 of the stock recommendations in the portfolio.

To see the portfolio, and read the rest of this commentary, just start a 30 day trial. Click the link below to learn more.

About the Reitmeister Total Return portfolio & 30 Day Trial

 


SPDR S&P 500 (SPY - Get Rating) shares were trading at $293.24 per share on Thursday afternoon, up $1.97 (+0.68%). Year-to-date, SPDR S&P 500 (SPY - Get Rating) has gained 18.97%, versus a 18.97% rise in the benchmark S&P 500 index during the same period.

 


About the Author: Steve Reitmeister


Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...


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