Stocks Close Lower, But Keep Your Eyes On The Upcoming Trade Milestones

Plus New Zacks Strong Buys for Wednesday, September 24 Profit from the Pros Stocks Close Lower, But Keep Your Eyes On The Upcoming Trade Milestones Stocks closed lower yesterday as politics seemed to grab the headlines. While markets were only modestly higher earlier in the day, they turned south after it was reported that a formal impeachment inquiry was going to be announced later in the day. Quite frankly, the market was due for a bit of a pullback after three prior up weeks in a row. And traders also needed to adjust their positions ahead of the U.S.-China trade talks in early October. So the political drama created the perfect excuse for the market to pull back and the adjustments to take place. But what does the heightened political discourse mean for the market? Quite frankly, I don't think it means that much right now. All politics aside – all that took place yesterday after the markets closed, was that the House majority gave a green light to pursuing a formal impeachment inquiry and to draw up plans on how to proceed. Then it will have to go to a House vote where a majority is needed to pass it. In the meantime, since the recent 'whistleblower' saga is the catalyst for the aforementioned inquiry efforts, the President has said he will release a transcript of the phone call that was made to Ukraine's President. And the Acting DNI (Director of National Intelligence), will testify before the House on Thursday regarding the matter. So we'll have to see what happens in the coming days. But in regard to the market, it really doesn't mean a whole lot. And our focus is only about how this impacts the market. The upcoming trade events (U.S. and Japan expecting to formalize a trade agreement at the UN this week; the U.S. and India expecting to finalize a trade deal this week as well; the resumed U.S.-China trade talks in early October; and the USMCA deal potentially being brought to the House floor for a vote by month's end), are far more important to the markets right now. Not to mention the start of Q3 earnings season in mid-October, and the possibility of another rate cut on October 30th. As I said before, I wouldn't be surprised to see more volatility ahead of all of that. Especially given the recent political drama. But keep your eyes on what matters most to the market. Next layers of support for the S&P come in at 2,950.01 (the 50-day moving average); 2,938.84 (which is a gap left on the chart from September 4th); then 2,914.39 (gap from September 3rd); and then finally 2,890.03 (gap left on the chart from August 28th). Whether we see those gaps filled or not remains to be seen. 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