This will be a split week as the US markets will be closed Wednesday as a national day of mourning for President George H.W. Bush. No word yet on earnings/economic reports rescheduling or what will happen with Fed Chairman Powell’s Congressional testimony for Wednesday. Corporate earnings calendar will see relatively low volume with notable reporters including but not limited to: (FNSR, COUP, AZO, DCI, DG, HDS, HOME, HPE, RH, TOL, SCWX, AEO, FIVE, LULU, KR, DLTH, THO, ULTA, ZUMZ and MTN) Brokerage Conferences will be in full swing as multiple brokers will host conference throughout the week.
On the Economic calendar we will see PMI and ISM reported across the board. On Thursday in the U.S. we will get Import / Export prices and Trade balances along with US jobs report and Michigan consumer sentiment on Friday. Abroad look for a Euro-zone meeting on Monday and ECB policy on Wednesday and Prelim GDP on Q3. Closing the week out in China with Balance of Trade late Friday night.
S&P bullish sentiment is now at 43% up sharply from recent low of 8% on 11/20. The question is if it can continue to move above 50%. The big Trump/Xi dinner resulted in exactly as predicted. De-escalation, a delay in additional tariffs (90 days) and both sides declaring they will work together. Perhaps both sides can claim success by standing up to the other yet both sides did make some concessions. I expect the markets to respond favorably although with last weeks big gains a muted response. Also out of the G20, Russia and Saudi Arabia agreed to extend their agreement on oil production cuts. Putin said “There is no final decision on volumes, but together with Saudi Arabia, we will do it.” Thursday and Friday OPEC meets in Vienna and will decide 2019 output targets.