Concerns over China?

Stocks are climbing higher today, following President Trump’s assurance that the trade agreement with China is fully intact.  This follows a statement made last night by White House trade advisor, Peter Navarro, who said the US – China trade deal is over.  Given Peter’s position, it seems there is reason for concern.  However, all stock investors needed was to read a Tweet from President Trump assuring the markets that everything is just fine.  As further news comes out, we could once again see an increased volatility in the stock market surrounding China and the stability of the trade agreement.

Rumors of a second round of stimulus checks to American workers is helping fuel the stock market higher.  The unprecedented amount of total stimulus since the economy fell has largely contributed to holding stock prices higher.  As the money that has been pushed into our system flows from consumers to businesses cycles through our economy, this helps expand our GDP.  Further, the trillions of dollars added will continue to flow as the money churns over and over.  Although this is considered highly inflationary, that is the last concern the Fed has right now.  Inflation is not anticipated to be an issue for years to come.

We will maintain a locking bias.