Will trade be the Grinch that steals Christmas for investors?

Christmas 2018 should be the biggest holiday retail season in history.

The U.S. unemployment rate, at 3.7 percent, is the lowest since 1969 and consumer confidence is at an 18-year high. Add to those data points that wages have finally started to show an increase which should continue in the November jobs data due on Friday.

Plus, oil prices remain low and the universal truth is we Americans love to spend money. Toss in some incredible products from our big tech companies, and it makes for a record Christmas. Shoppers already racked up a record $6.2 billion in online sales on Black Friday and another nearly $8 billion on Cyber Monday, according to Adobe Analytics.

As of now, Apple is set to rake in more than $91 billion in sales this quarter, according to estimates, and with a little luck could it may be the world’s first $100 billion quarter.

Ticker Security Last Change Change %
AAPL APPLE INC. 180.95 +0.86 +0.48%

Consumers could get another gift in the form of stable interest rates. Federal Reserve Chair Jerome Powell indicated late last month that interest rates will stay lower than planned. His slight shift to a less-hawkish tone seemed to be giving into President Trump's wishes after months of Fed slams which shows policymakers don’t appear to be above the political winds of the presidency.

An added holiday bonus: Trump and Chinese President Xi Jinping have agreed to a trade truce, but is the war over? Despite rosy rhetoric from both sides, the stock market needs more convincing because the potential for a lengthy trade war with no winner is very real.

I hope the trade war ends, I hope America wins, but I do believe that we could be in for a long journey. The one hope is that China and the U.S. both figure out a way to declare victory and call this whole thing off, but that doesn’t seem as likely as a prolonged trade war.

An unresolved trade war will add fuel to the global slowdown already underway. Brexit is a disaster, Italy won’t be real about its debt and the European Union is in trouble.

Here at home, I think the U.S. economy continues to do well, albeit at a slower pace, but I think the market could hit a top this Christmas season for all of the reasons mentioned. It certainly helps that the Fed is on the side of the markets but there are a lot of headwinds swirling about.

I am not completely bearish, I just believe we are in for a much rougher 2019 with the markets and I would recommend caution when buying stocks.

John Layfield is FOX Business contributor and is the longest reigning WWE Champ in Smackdown TV history. Follow him @JCLayfield.