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The Week of Climax!

Once in a while a week comes when so many events line up that it feels like we are reaching climax of many! Next week feels like that.  Let's look at some of the events which could reach climax

Finals Week:
Since both my kids are in college, I know when is Finals Week and what it means. Next week is finals week for them (one of the final is on today Sunday - who schedules final exams on Sunday?) Knowing the pressure of finals and maintaining grades, I am only imagine the relief these kids will have at end of week. I am definitely looking forward to seeing smiles on their faces after finals are over!

Trade-War:
While President Trump may say that there is no deadline, he has to make a call if he plans to put tariffs on rest of Chinese imports (including iPhones) on Dec 15 or not. That would give a signal to world if phase 1 deal is near or would continue what has been going on for last 12-18 months. So in a way, Dec 15 would be a day of climax for trade war between US and China. This would also be market moving event.

Brexit:
After 3 and half years of countless negotiations, potential deals, failed votes in UK parliament, 3 prime ministers and as many elections, it has come down to Dec 12 elections. This election is almost like re-referendum on Brexit. UK citizens have a choice if they want Brexit or not and accordingly vote. The only good thing is that finally this Brexit drama would be over - hope so since you can never predict what UK politicians may do.

Fed Meeting:
Fed is having its last meeting of 2019 to decide interest rate direction. Exactly 12 months back, Fed spooked market by increasing the rate in last meeting of 2018 and giving indication that more increases are coming. What a difference 12 months make?  Fed not only changed the course but reduced interest rates 3 times since then. This meeting would be less dramatic. Fed would stay the course of pause given mixed signals on economy, employment and inflation. Most likely 2020 FED meetings would be "no event or do nothing" and that would be a good thing.

Economy and Markets:
Economic signals are mixed. Both Manufacturing and services readings are below expectations signaling potential trouble in making. Inflation is low. Employment is again at 50 year low with Nov employment report is strongest in many months. Holiday shopping season started with a bang (even though crowds in malls are noticeably less - that means online shopping is really becoming mainstream). Markets are generally reacting positively and are up by 28% till date in 2019. Another 2-3% increase and it will beat 2013 record. With best month for markets underway, S&P can touch 3200 before year end (my prediction was 3100 few weeks back). 

So let's wrap these climax events and get ready for holidays. My next update would be in new year with 20 recommendations for 2020!

Happy Holidays!
/Shyam

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