“Don’t look for the needle in the haystack. Just buy the haystack.” — John Bogle, founder of Vanguard

1. IMF Cuts Global Growth Outlook — the IMF has downgraded its global growth forecast to 3.5% from 3.7% in its October outlook, partly due to the negative impact of U.S. and China tariff increases. Risks to economic growth are “tilted to the downside,’’ citing the threat of a widening trade war, Brexit and a steeper-than-anticipated slowdown in China. “Financial conditions have already tightened since the fall. A range of triggers beyond escalating trade tensions could spark a further deterioration in risk sentiment with adverse growth implications, especially given the high levels of public and private debt.”
2. China Increasing Fiscal Spending After a Rough 2018 — finance ministry officials said China will increase its fiscal spending in 2019 to offset last year’s turbulence from the US-China trade tensions. Growth last year was the lowest in nearly three decades while fiscal spending rose 9% to 22.1T yuan. China could cut taxes and small firm fees.
3. China and U.S. Plan In-Depth Talks Next Week — China and the U.S. will have in-depth talks on economic and trade issues when Chinese Vice Premier Liu He visits the U.S. next week, Reuters reports, citing the Chinese commerce ministry. Reports that the U.S. canceled preparatory meetings with China are untrue, a commerce ministry spokesman told reporters. On Wednesday, White House economic adviser Kevin Hassett said he believes a trade deal could be reached by March 1.
4. Trump, Congress Reach Tentative Deal to Reopen Government for Three Weeks — President Donald Trump announced a deal to reopen the government for three weeks, ending a 35-day partial shutdown without securing any of the border wall money he had demanded. The stopgap measure includes no money for a border wall, two people familiar with the matter said.
5. Weekly AAII Investor Sentiment — in the latest AAII Investor Sentiment, Bullish sentiment ticked back up this week to 37.7% after falling to 33.5% last week. This comes as the S&P 500 has traded above its 50-DMA for a week now. The weekly investor sentiment survey conducted by AAII has come off of extremely low levels from the late 2018 sell-off and has maintained above 30% readings for all of 2019 so far.

Meanwhile, Bearish sentiment fell 4% this week down to 32.3%. Bearish sentiment has fallen off of extremely elevated levels following the Christmas Eve sell-off. While it has fallen, bearish sentiment remains above the historical average of 30.5%, though not by much.

The week ahead — Economic data from Econoday.com: