A number of uncertainties that prompted much of the Fall market correction and associated volatility are behind us. Notably, the Federal Reserve has backed off its hawkish position to raise interest rates aggressively, and the investor perception is they will be more data dependent and cautious. Bond yields may have peaked. Earnings season has come and gone and investors are able to sort the winners and losers, determining the innovation cycle remains well under way in software, communications, infrastructure, and healthcare. Global economic slowing is a fact, but does not appear to be leading to a near term recession. The US consumer is not dead.
What remains is concern over the potential trade war between the US and China. And here, investors wait with bated breath the outcome of the meeting this weekend between the two principle antagonists, President Trump and President Xi Jinping. If both find a way to declare victory and move on, the market will likely respond very positively next week.
And speaking of the innovation cycle, we anticipate news in the coming days that will underscore the strides being made in biotech. So next week should be an exciting one for investors and perhaps we can get back to focusing on fundamentals, at least for a few weeks.