As 2019 winds down, investors have never been so broadly certain about the overall market thesis. Unfortunately, that thesis calls for unavoidable uncertainty and the inability to clear it up very quickly. Reason being: we need to see if global economic data is going to reverse course and make improvements. We also need to see how the US/China trade negotiations will evolve.
Trade is so important because investors are viewing it as one of the most time advance indicators imaginable. In other words, if a trade deal happens, it may not be fully reflected in the economic data for several months. Trickle down effects could take years. Granted, a deal will probably happen, but the details and the timeline remain intentionally mysterious. That's one of the key reasons markets seem to put too much faith in every little trade headline as a potential market mover.
Indeed, that was today's key event as a CNBC reporter said Chinese officials were frustrated about Trump denying the plan to roll back tariffs. The same report suggested China could wait for impeachment proceedings to finish or even for the next presidential election. Stocks and bond yields shot quickly lower on that news but gradually stabilized in the afternoon. Bonds ended the day with modest, but important gains (because they keep us well within the broader consolidation trend--i.e. basically living to fight another day).