Five Scenarios The Option Edge is Monitoring
The US – China Trade Deal – On September 5th, 2018, the end of the comment period on the 25% on $200 million dollars in Chinese imports. Currently the market is confident that the tariffs will not go into effect. If they do, a pullback could happen.
December Fed Rate Hike – There are two more Federal Reserve meetings this year. In September, most investors are betting that the reserve rate will be raised by 25 basis points. the bullish scenario would be a pause in December until the long end of the yield curve starts to move higher. The Bearish scenario – the Federal Reserve hikes rate both in September and in December. We will have to wait until December to see this one play out.
U. S. Dollar – 94.20 is the key level in the U. S. dollar that we are watching. A close on heavy volume below this level will signal another leg higher in the stock market.
Q3 Earnings Season – October 8th is the start of Q3 earnings season. The rally this year has been an earnings-based rally. If there is any break in earnings, the market could begin to take a breather. Growth needs to continue for the market to continue higher.
Midterm Elections – The midterm elections should result in a split congress and once again the government stalemated. A scenario that is not bad for the market. Election day is on Nov. 6th, 2018.
Labor Day
The First Labor Day. The first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union. The Central Labor Union held its second Labor Day holiday just a year later, on September 5, 1883.
Global Spotlight
Some Progress on Trade … Following a dramatic week of NAFTA negotiations, the United States and Canada will continue talks on Sept. 5 to try and hammer out a final agreement.
… And More Risk. It’s a bumpy ride, but we still can call recent signals on NAFTA “progress.” Some observers will point to the NAFTA example as evidence that the Trump White House is on a more moderate path on trade. Not so.
Navigating a North Korea Standoff. The United States and North Korea are at another precarious standoff, with Pyongyang not satisfied with a U.S. offer to exchange a peace declaration for a declaration of nuclear assets.
Rouhani’s Allies Are Falling Like Bowling Pins. Ahead of U.S. energy sanctions on Iran snapping back in November, Iranian oil exports are falling even quicker than originally expected. (September exports are expected to reach just 1.5 million barrels per day compared with 2.7 million bpd in May.)
Will Damascus Gamble With Another Chemical Attack? Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan will make their way to Tehran on Sept. 7 to talk Syria as Damascus pushes for an offensive on Idlib.
Balkan Watch, Continued. Serbian and Kosovar leaders will meet in Brussels on Sept. 7 to resurrect negotiations for a normalization of their bilateral ties.
Stratfor.com
Economic Calendar
Here isa a list of the U.S. economic events happening this week.
Briefing.com
Review Last weeks numbers here.
