US stocks are headed for another record high this morning and financial media explanations for the move reference progress in US/China trade talks.
To the extent that such talks materialize in more reliable and predictable economic outcomes is good but only if such outcomes result in the all-important inputs to the valuation models professional investors use: i.e. earnings, interest rates, risk and liquidity. At present, US earnings forecasts for 2020 are the key driver for the record stock prices we see as the following numbers, courtesy of Sam Stovall (CFRA), make crystal clear. To the extent that better (i.e. more sane) trade relations add to the already positive numbers noted for 2020 can only further support the record stock prices.
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