Trade Deal? – Here’s what traders are focusing on this week…

It was another wild week of trading with the S&P closing at 2-week highs.

On Monday, stocks rallied early but finished with losses after the U.S. banned 28 Chinese companies from doing business with U.S. companies.

Then on Tuesday, stocks were down big after news that the U.S. was restricting visas of Chinese officials over alleged human rights violations and rights abuses. 

It was a rough start considering trade talks were scheduled for later in the week.

But stocks were higher on Wednesday, ending the day with a nice gain after news that China was open to a partial trade deal as long as Trump agreed not to raise tariffs.

On Thursday, stocks were up again after Trump says that talks “went really well.”

Then on Friday, the major indices were up almost 1.0% at the open after Trump sent another optimistic Tweet about trade.

Trump wrote, “Good things are happening at China Trade Talk Meeting. Warmer feelings than in recent past, more like the Old Days. I will be meeting with the Vice Premier today. All would like to see something significant happen!“

Then stocks rallied again after President Trump announced a partial trade deal and Treasury Secretary Steven Mnuchin announced that tariffs would NOT increase on Tuesday as originally planned

Although stocks pulled away from highs on Friday, the S&P still managed to finish the day with a 1.1% gain, helping the S&P and DOW snap a 3-week losing streak

In one word, here’s what traders are focused on right now: TRADE.

Every significant move last week was tied to trade news and developments.

By the end of the week, here’s what we know:

• Phase one of a trade deal will be finalized over the next 3 weeks. This phase focuses on currency and financial issues. As part of the agreement, China will purchase $40 billion – $50 billion in U.S. ag products.
• Phase two will be worked on as soon as phase one is complete.
• The U.S. will not raise tariffs on Tuesday. But according to U.S. Trade Rep Robert Lighthizer, a decision hasn’t been made for tariffs scheduled for December.

Here’s where the major indices ended the week:

• The S&P finished with a 0.6% gain. Up 18 points, the S&P ended at 2,970.
• The DOW ended higher by 0.9%. Adding 243 points, the DOW closed at 26,817.
• The NASDAQ was up 0.9%. With a 75 point gain, the NASDAQ finished at 8,057.

Crude Oil (CL) snapped its 2-week losing streak and ended the week higher. With a 3.8% gain, CL ended at $54.77 a barrel.

Caterpillar (CAT), had a great week, helped out by positive trade news. The stock was higher by 4.7% on Friday and finished the week with a 6.1% gain.

Chipmakers and tech stocks were also big winners after Friday’s trade optimism. 

On Friday Micron (MU) was higher by 4.0%. 

And Apple (AAPL) finished with record highs, ending the week with a 4.1% gain.

In earnings news, Fastenal (FAST) jumped 17.2% after better than expected earnings.

This week trade will remain in the spotlight. We’ll also get Q3 earnings from big banks like JP Morgan Chase (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), Goldman Sachs (GS) and Morgan Stanley (MS).

Monday is a U.S. holiday (Columbus Day) and bond markets are closed. But major stock exchanges will be open.