Optimism over a"phase one" trade deal between the United States and China is pushing stocks to record highs in the final days of the year. But Although the world's two largest economies are inching closer to signing a preliminary deal, many investors remain skeptical following the carrot-and-stick approach on the trade this year.On the one hand, Washington and Beijing have only agreed to a"phase one" deal so far.
On the other hand, trade developments could also could surprise markets with positive developments. That could pose a risk to investors expecting slower progress in negotiations. "The best environment for stocks is when the ISM [manufacturing index] has deteriorated and fallen below 50 but then reverses course and starts to improve," said Jonathan Golub, chief US equity strategist at Credit Suisse.