The market is making all time highs as a number of different economic events play out. We have fed rate decisions, ECB rate decisions, Brexit and trade war all occurring simultaneously.

All time highs on all major US indices

The recent rally can be attributed to Trump backtracking on his “pedal to the metal” trade war mentality. He threw China a life jacket by making false claims of phone conversations at the highest levels nearly 3 weeks ago. China grabbed the life jacket and used it as an opportunity to ease trade tensions and make serious progress towards a deal. There are talks scheduled for October and both countries are open to an interim deal until a more definitive agreement can be reached.

The U.K. nears an October 31st deadline for Brexit and they are on a path of no deal. Boris Johnson is committed to Brexit and will force it to occur whether there is a deal or not. Johnson’s conservative party is up in flames and there remains no clear path to Brexit, as the U.K. hasn’t established the required trade deals to stop their economy from sinking into the English channel. All this while the ECB ramps up stimulus and cuts interest rates some more. All in all, Europe looks pretty bleak…

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