With economic data being relatively good and the earnings season pretty much over, traders have turned once again to geopolitical events to find market direction.
And in that, trade has continued to dominate the headlines. Over the last few weeks, the repeated freezing and thawing of major trade deals across the world have resulted in wide swings. This week was no different. The U.S. and China continued to escalate their trade differences with another round of tariffs and reactionary taxes on a variety of goods. However, with tariffs being less than expected, some traders seemed pleased that there may be limits to just how far the nations are willing to go to fight the trade war.
As for data, a surprise win in the housing sector as well as continued dropping crude oil inventories helped with the good mood on the street this week. With not much in terms of data being released, any good news was certainly welcome.
The same couldn’t be said for the earnings picture this week. The vast bulk of the market has already reported this quarter’s results and those who did report painted a mixed bag. Several key benchmark firms reported poor numbers, with the trade war being the top reason.
However, even with the poor earnings news, investors seemed pleased with the markets and stocks managed to gain on the week overall.