The United States and China have faced growing economic pressure to reach a trade deal. However, the stress may be fading for one party.

As shown in LPL Research’s Chart of the Day, China’s economy is exhibiting signs of stabilizing growth, according to composite leading indicators (CLI) data from the Organisation for Economic Co-operation and Development (OECD). The OECD’s assessment of the Chinese economy improved for a sixth straight month in August, while the OECD’s U.S. gauge continued to slip.

To be sure, the OECD’s leading indicators gauge shows that both the United

“The economy, stupid” — Phrase campaign strategist James Carville used to help Bill Clinton get elected in 1992.

As Carville noted ahead of the 1992 election, the recession in 1990 and 1991 was top of mind for many voters as they headed to the polls to vote for either incumbent President George H.W. Bush or opponent Bill Clinton. And now we see investors becoming more skittish around the U.S. economic outlook just before we flip the calendar to 2020, a presidential election year. Is there any logic behind the idea that a well-performing economy tends to make voters feel better about voting for the current admini

Geopolitical matters¹ have complicated the tug-of-war between fiscal² and monetary³ policies and contributed to investor concerns about increased policy uncertainty. Policy uncertainty will likely persist, but we think financial markets will climb this wall of worry.

Our View

Investors are facing a host of unresolved international and domestic issues, in addition to an upcoming U.S. presidential election, all of which are contributing to an overall sense of uncertainty. Luckily, financial markets have been adept at powering through “walls of worry” in this bull market, which is now in its 10th year.

Equities

Stocks fell for a third straight week as investors gauged the health of the U.S. economy and its impact on future monetary policy. The S&P 500 Index climbed on September 30 after the U.S. administration denied claims that the United States is exploring plans to limit U.S. investors’ portfolio flows into China. Then, the S&P 500 kicked off the fourth quarter with a 3% slide over two days, spurred by pessimism after an Institute for Supply Management (ISM) report (released Monday) showed manufacturing activity fell to a 10-year low in September. Tepid data flow continued into Thursday, when a separate ISM report showed