Trade War Pessimism, the Warren Factor and Climate Summit Impact

For trading stocks successfully, you need to be prepared for the vagaries of the market. While commission free trading works to encourage you to start trading, continuous success requires a good understanding of the market and how various factors could influence it and set the tone for the week.    

The trade war with China and all the news related to that has been dominating recent weeks. There was a temporary agreement reached by which China agreed to buy more agricultural goods from the United States. This raised hopes of an end in sight to the imposing of tariffs and counter-tariffs by these countries on imported products.

Impact of Chinese Delegation’s Montana Visit Cancelation

But on Friday, September 20, the opposite of optimism was seen in Wall Street as a delegation from China cancelled a visit to America’s agricultural heartland of Montana. The delegation, already in the United States, had planned to visit the farm states in the US. This was seen as an indication of China’s partnership with the United States and the potential end of any rough edges in the trade discussions. But according to a Reuters report, the Chinese delegates chose to leave earlier than they had originally planned. As a result, the major indexes all experienced drops.

The reason for the change in plans was what transpired in the trade talks that took place in Washington. President Trump expressed his lack of interest for just a Chinese agreement to buy more American agricultural produce. Trump wanted a more comprehensive trade deal. Prior to this cancellation, the optimism over the potential resolution of the trade war had raised the S&P 500 to a level that was just a little short of the all-time high it had reached in July.

Elizabeth Warren Fears

Moving ahead, this week has another concern, supposedly in the form of Elizabeth Warren. Fox News reports an executive on the Wall Street predicting a “very vulnerable” situation for the stock market should Warren ever become US President.

To get things into perspective, Elizabeth Warren is vying for a Democratic presidential nomination, and blogger Matt Drudge is reported to have stated that she’ll win the nomination almost certainly. And if that happens and she manages to win the presidency, which looks probable, hedge fund head Leon Cooperman reckons the markets could struggle because of Warren’s supposedly Leftish, anti-capitalist views. Generally, the stock markets are wary of Warren, and it remains to be seen how the market reacts this week.

The Climate Summit Shifts Focus to Climate Control Stocks

The big event this week is the climate summit by the United Nations. There are companies that would like to benefit from this by indicating that they provide technologies to keep the climate change from happening. And there are also companies specializing in technologies enabling people to adjust to a world changed by the climate.   

We’re talking about companies such as Ingersoll-Rand ($IR), Johnson Controls ($JCI) and United Technologies ($UTX) that manufacture climate control products including air conditioners. This year, these stocks have already outpaced the S&P 500, rising 25% while the latter is only up by around 20%. It’s worth watching out for these stocks this week as the climate summit progresses this week. The heat wave that’s ravaging through Europe, the United States and Asia makes these products all the more relevant. 

With direct market access trading offered by online broker dealers, getting started in trading stocks is a lot easier. But always watch the markets.

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