After a pause on Thursday, the indices are back on track Friday morning as the market anticipates a meeting this afternoon between President Trump and Chinese Vice-Premier Lui at 2.30 p.m. ET. The fact that there is a meeting is generally viewed as a sign that progress is being made. There is anticipation that the President may announce a delay in the imposition of tariffs on March 1 and discuss a timeframe for meeting with President Xi.
This is the sort of news flow that has prevented the bears from gaining any traction in this market. The selling on Thursday gave the bears a little hope -- but there is no fear right now that the market is going to fall apart when there is the potential for progress on trade.
The bears are increasingly focused on slowing economic growth, but the Fed is now firmly dovish and that is helping to offset that issue. A number of Fed members are scheduled to speak today at various meetings and there is likely to be more headlines about how they are now prepared to deal with a slowing economy.
The bears may have a compelling narrative to justify their position, but they can't overcome the market's anticipation of good trade news and a very dovish Fed. They try to dismiss those things in various ways but the market is simply not listening to those arguments.
While upside momentum in the indices has been slowing, that has been offset recently by better action in individual stocks. The market is being driven more right now by market players looking for values in individual stocks rather than focusing on the direction of the indices. For example, Friday morning, there are recommendations of Intel (INTC) and Citigroup (C) , which are based on their individual merits rather than overall market conditions.
The market is going to be intently focused on news from President Trump about his meeting this afternoon. The tendency is always toward a positive spin on progress -- and the market seems willing to accept that. Many skeptics scoff at the potential of a good deal with China, but the market certainly seems optimistic and that is the only thing that matters.
We have a positive start to the day, but will be on hold while waiting for news this afternoon.