ECONOMIC SILUET: Election a risk for stocks | Will U.S., China ever meet?

Rabu, 06 November 2019

Election a risk for stocks | Will U.S., China ever meet? | Xerox bids for HP

WED, NOV 06, 2019

EVENING BRIEF

AS OF WED, NOV 06, 2019 • 03:59 ET

DJIA		27486.19
		-0.02%	-6.44

S&P 500		3075.92
		+0.04%	+1.30

NASDAQ		8407.91
		-0.32%	-26.77

Most Active

DOW
NAME	LAST	CHG	%CHG
AAPL	257.18	+0.05	+0.02%
INTC	57.55	+0.32	+0.55%
MSFT	144.03	-0.43	-0.30%

S&P 500
NAME	LAST	CHG	%CHG
GE	11.04	+0.07	+0.64%
HPQ	19.49	+1.09	+5.92%
AMD	35.90	-0.25	-0.69%

NASDAQ
NAME	LAST	CHG	%CHG
AMD	35.90	-0.25	-0.69%
MU	47.66	-1.01	-2.08%
CMCSA	44.19	-0.09	-0.20%

EDITOR'S NOTE

It looks like a U.S.-China trade deal will have to wait.

President Donald Trump and Chinese President Xi Jinping have yet to agree on terms or even a neutral place to meet, writes CNBC's Kayla Tausche and Jordan McDonald. The goal is still to reach some level of agreement by Nov. 16, a senior administration official told CNBC, but that's looking increasingly unlikely.

Markets, hovering just below record highs, turned in mixed results on Tuesday, unconcerned with the latest trade talks news.

Beyond uncertainty over trade, we're now just a year away from the next presidential election, which is the biggest risk to the market, according to David Kostin, chief U.S. equity strategist at Goldman Sachs.

Kostin sees a wide range of possibilities for 2020, depending on what happens.

He says markets are betting the Democrats with keep the House, Republicans will keep the Senate, and then there's a slightly better than 50% chance that Democrats could take the White House.

The outcome would still be gridlock, which is typically good for markets, or at least a lot better than a wholesale undoing of the Trump tax cuts and regulation easings. Kostin's baseline case for 2020 in this case is a 10% gain.

Not everyone is even this bullish. CNBC's Patti Domm writes that a dramatic decline in earnings expectations does not bode well for stocks.

"There is no debate on S&P 500 forward earnings: a contraction appears imminent," UBS equity strategist Francois Trahan said Tuesday. "An actual contraction in forward earnings usually spells a difficult backdrop for the overall equity market."

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