What a difference a day makes! After learning the US and China have reached a tentative that removes the looming tariff overhang, the bulls easily pushed the DIA, SPY, and QQQ to new record highs.  Futures this morning seem quite confident that the President will accept the Phase 1 agreement removing the weekend stumbling block and clearing a path for a possible Santa Clause into the new year.  The huge victory for Boris Johnson in the UK sets the stage for Brexit to occur, and the Sterling is soaring as a result.  After a long day debate, the House committee is likely to vote on impeachment today but with the trade news it will likely be a non-event for the market.

Overnight, Asian markets rallied as much as 2%, with the pending weight of new tariffs now lifted.  European markets are also in rally mode this morning in reaction to the trade deal and the history-making UK election results.  US Futures point to a substantial gap up open that well set new records for the second time this week.  Remember, gaps are gifts so consider taking some profits as we head into the weekend.

On the Calendar

On the Friday Earnings Calendar, we have only 11 companies reporting results and there are no particularly notable events today.

Action Plan

What a difference a day makes.  Yesterday we learned the US and China reached a tentative agreement.  We are still waiting on the President to accept the deal but the market seems quite positive he will do just that.  Although there are very few details about what’s in this Phase 1 agreement, the bulls confidently set new record highs in the DIA, SPY, and QQQ after hearing the news.  The UK Prime Minister Boris Johnson accomplished a remarkable win that will secure Britain’s exit from the Euro block.  After 14 hours of debate, the impeachment committee postponed their vote until sometime today to send the articles of impeachment to the full house for their decision.

The market’s around the world are responding positively to the trade news helping the US Futures point to yet another record-making day at the open.  Assuming the President will accept the deal sometime today, we have the makings for a very bullish day to close the week.  Removing the massive tariff overhang from the weekend will make it much easier for the bulls to remain in control of this trend.   It may also open the door for a nice Santa Clause rally as we head into the New Year.

Trade Wisely,

Doug