December Could be Another Great Month for Markets, But…

At record highs, markets have had a great year – so far.

Historically, things could get even better.  

“December is the best month of the year. The S&P is up 1.6% on average. It also has the highest frequency of advances, up 76% of the time,” said Sam Stovall, chief investment strategist at CFRA, as quoted by CNBC. “The market tends to go through a mid-December low, which then represents a good buying opportunity, at least through the end of January.”

Lindsey Bell, chief investment strategist at Ally agrees, noting, “December has historically been a strong month for stocks,” as quoted by MarketWatch. “Barring an exogenous shock like a Fed rate hike or trade news, December should repeat this pattern.” 

Unfortunately, that could easily be put at risk.

Should tensions with China boil over, and new 15% tariffs are implemented on $160 billion in Chinese imports, all bets are off for higher market highs.

In fact, without a “phase one” deal in place, the December 15 deadline on 15% tariffs is quickly approaching.  Worse, Trump has noted that if “we don’t make a deal with China, I’ll just raise the tariffs even higher,” as noted by Markets Insider.  

At the same time, Trump is now bringing back tariffs on Brazilian and Argentinian steel.  

“Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries,” quoted by MarketWatch.