Bulletproof stock market shakes off negative trade headlines and keeps marching to records

Negative trade headlines, which have caused chaos with the markets at times over the last two years, have seemed to lose their ability to knock the stock market down lately as it marches to records. Investors pointed to a number of reasons why this market just seems to want to go higher as it ends 2019.

Just on Tuesday, President Donald Trump threatened to raise tariffs even higher if there’s no deal with China. The S&P dipped slightly and then came immediately back. On Monday, CNBC’s Eunice Yoon reported that Chinese officials were pessimistic about a trade deal. Stocks opened the day lower but then eked out record highs before the close.

Among the reasons cited for the market tail wind in the face of fragile trade negotiations are investor year-end positioning and adjustments made by companies to deal with tariffs if they remain. The economic impact of the existing tariffs have also been more limited than initially feared.

“The reason this market continues to rally is that nobody is selling,” said Matt Maley, chief market strategist at Miller Tabak, in a note. “This is especially true for institutional investors. It has been a great year…so they cannot afford to take any chips off the table as we move into the last six weeks of the year.”

In other words, with the S&P 500 up nearly 25%, professional investors don’t want to be the ones that sell early and then have to explain to clients why they missed out on a potentially historic year of gains. The benchmark is on pace for its biggest annual gain since 2013, when it surged nearly 30%.

It’s been a slow march upward. Wall Street’s recent climb to record highs has mostly come through small gains at a time. The S&P 500 has recorded just two advances of at least 1% since Oct. 11. In that time, the index has posted 14 gains of less than 0.6%.

Stocks haven’t had any meaningful pullback over that time period either. The S&P 500 has fallen nine times since Oct. 11, with none of those moves even reaching the 0.4% mark.

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