As we kick off the fourth quarter, traders and investors are bracing for key market indicators, while China is preparing a very large and very risky stimulus package. Jared A Levy breaks down how you can navigate markets as these stories develop.
Traders Watching the Fed
The week ahead is crucial, with the upcoming jobs report on Friday being a focal point. According to Jared, this report will be pivotal for traders speculating on the likelihood of another 50 basis point rate cut by the Federal Reserve in November.While a rate cut could be beneficial to the economy, Jared warns that it might also fuel fears of instability, especially as cracks in the labor market start to show. In addition to the jobs report, Jared is keeping an eye on ISM PMI services and factory orders data to get a clearer picture of the economy’s direction.
Stimilus “Bazooka” in China
One significant global event that Jared highlights is China’s recently announced $104 billion stimulus package, which is making waves in the market. Dubbed a “bazooka of stimulus,” this package aims to boost China’s economy, but Jared is skeptical about its long-term effectiveness. However, in the near term, it presents a solid trading opportunity.
China Focused ETFs that Might Benefit Short-Term
For traders looking to capitalize on China’s stimulus, Jared recommends investing in emerging market ETFs like EEM, which has a significant focus on China. Another option is FXI, a China-focused ETF, which Jared suggests buying at around $31 with a target price of $36. Both of these ETFs are poised to benefit from the stimulus but should be considered short-term plays. Jared advises caution, recommending taking profits after a 5-10% gain and avoiding long-term exposure due to the unpredictable long-term impact of China’s actions.
As the fourth quarter unfolds, staying on top of key market data and global events like China’s stimulus will be critical for traders aiming to navigate the volatility ahead.
CLICK HERE to watch Jared Levy on Business First AM covering his Intel Trade.
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