Zheng Yongbo | Visual China Group | Getty Images
Checkpoint soldiers are on guard at a container terminal on May 25, 2017 in Lianyungang, Jiangsu Province of China.
Stocks are off to a hot start this year, with the S&P 500 rising more than 11 percent through Tuesday’s close. Increasing expectations that a trade deal will get done have partly helped equities surge in 2019.
However, there is growing fear that an agreement may be fully priced in, possibly limiting any more gains from positive trade news.
“The concerns around trade have really held back the U.S,” said Greg Luken, CEO of Luken Investment Analytics. “If you talk about the wall of worry right now, there’s a level of anxiety, just from talking to clients, they have not had since 2013, when we had worries that the EU was going to melt down.”
Recently, the S&P 500 has had trouble making a significant break above 2,800, a key level being watched by investors. The broad index closed above that level on Friday, but fell back below it this week.
Investors also digested key economic data on Wednesday. ADP and Moody’s Analytics said private payrolls rose by 183,000 in February. Economists polled by Dow Jones had forecast a gain of 185,000. January payrolls were revised higher by 87,000 to 300,000.
Meanwhile, the U.S. trade deficit increased to a 10-year high of $59.8 billion despite the administration’s efforts to reduce the number. Economists surveyed by Refinitiv expected the number to increase to $57.3 billion.
“There’s just a lot of good news priced in. We’ve had more than a year’s worth of gains already on the progress with China and the Fed [staying patient],” said Aaron Clark, portfolio manager at GW&K Investment Management. “It makes sense that we get a digestion period after such a strong rally. I think that’s what we’re seeing now.”
General Electric shares fell more than 4 percent after J.P. Morgan analyst Stephen Tusa said in a note the company’s stock is overvalued given the hurdles it faces over the next two years. Tusa kept his price target at $6 per share, noting that “looks generous” at this time.
—CNBC’s Silvia Amaro contributed to this report.
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