U.S. And China Signal They Still Want To Make A Deal, While U.S. And Japan Appear To Have Already Made One

Plus New Zacks Strong Buys for Tuesday, August 27 U.S. And China Signal They Still Want To Make A Deal, While U.S. And Japan Appear To Have Already Made One Stocks surged yesterday, with all of the major indexes gaining 1% or more. While that didn't erase Friday's pullback, it was a good start. News that China still wants to make a deal calmed the markets. In fact, China's Vice Premier Liu He said, "China is willing to resolve its trade dispute with the United States through calm negotiations and resolutely opposes the escalation of the conflict." That, along with numerous phone calls to the U.S. trade negotiating team, and President Trump's stated willingness to continue the talks, eased market jitters. But traders also cheered the $7 billion dollar trade deal (in principle) between the U.S. and Japan over the weekend. Details were short, but U.S. farmers were hailed as winners with Japan expected to buy large purchases of corn and cut tariffs on beef, pork, and other agricultural products. (The deal also included industrial products and digital trade, but no further details were given.) But that was enough to show the U.S. wants to expand trade, as long as it's on a level playing field. That deal is expected to be finalized in mid-September. That also appeared to mitigate concerns, for now, that the U.S. can come to friendly terms with France and the European Union on trade. The softer tone also allowed traders to refocus on Fed Chairman Jerome Powell's bullish speech in Jackson Hole last Friday where he said the U.S. economy is in a "favorable place", and that it continues to "perform well overall." He also reiterated the Fed's commitment to "act as appropriate to sustain the expansion." That means lower rates. And right now, the odds are more than 90% that we'll see another rate cut in September. That's great news for the economy and the market. Although, I wouldn't rule out more volatility as we approach the increasingly important month of September where we'll see tariff deadlines reached, trade negotiations with China continue, a trade deal with Japan likely signed, and a decision by the Fed on their next move on interest rates made. But I remain bullish on stocks. So if we do see more downside pressure, I'd be a buyer on the dips. Gladly, the S&P closed back above trendline support yesterday. Let's see if they can string together another day of gains today. See you tomorrow, Kevin Matras Executive Vice President, Zacks Investment Research Sponsor [Claim your Free Copy of Finding #1 Stocks]( [Finding #1 Stocks Report] One single idea changed Kevin Matras' life as an investor, enabling him to tap into the greatest force driving stock prices. In Finding #1 Stocks, Kevin reveals his top stock-picking secrets and strategies based on this powerful idea. 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