Markets seize on Trump's happy talk
EDITOR'S NOTE
The Dow is up about 300 points as I write this, and the only real reason I'd cite is because it wants to rally today.
We just heard from President Trump and his language on tariffs and China isn't new. Markets are seizing on the fact that he said he thinks the trade dispute "will turn out really well" and that the talks "have not collapsed."
That echoes his remarks last night, at a White House event, where the president said regarding Secretary Mnuchin's return from China, "We'll let you know in about three or four weeks whether or not it was successful...I have a feeling it's going to be very successful."
That's all well and good, but the president also said this morning that China did more than "renegotiate" the deal - he said they broke it. Here's the real question now before us: does the U.S. accept a deal that doesn't acknowledge Chinese intellectual property theft, that has no substantive change on that front, and that has no real enforcement?
The president says the U.S. can afford to be tough here. We'll see how much appetite the administration really has for that. Markets could care less about changing China's misbehavior--they simply want a deal and for the tariffs go away. We'll see if Trump capitulates, or if he can come up with a different type of leverage that would do less harm to the U.S. economy.
More on this at 1 p.m. Derek Scissors of AEI is back, and we'll talk about whether sanctions could really be an alternative route to tariffs here.
See you then!
Kelly
P.S. Beyond Meat is up more than 10% today to $77. It IPO'd at $25!!!
KEY STORIES
IN CASE YOU MISSED IT
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Post a Comment