The market is wrong for already pricing in a trade war resolution being reached

by birkswithsocks

  • US and Chinese negotiators continue trade talks in Beijing on Tuesday, April 30 and Wednesday, May 1. Mnuchin calls the talks “productive” and confirms that the two sides will continue negotiations in Washington the next week.
  • May 5, 2019: Trump threatens to raise tariffs on China. Trump says that the tariff increase is being done because the Chinese side is attempting to “renegotiate” the trade deal and is backsliding on commitments. (But I thought talks were positive).
  • May 10, 2019: U.S. increases tariff from 10 percent to 25 percent.
  • June 21, 2019: (Reuters) — The S&P 500 hit a new all-time high on Friday, as U.S. Vice President Mike Pence’s decision to defer a planned speech on China policy rekindled optimism over trade talks between the world’s two largest economies. The decision was taken amid “positive signs” that trade talks with China could be back on track, the Wall Street Journal reported, citing a senior administration official.

This just feels like the market is setting itself up for a huge disappointment.

 

 

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