China chess match
The stock market has whip sawed over the previous three days as news continues to be selectively leaked about the current state of negotiations between China and the United States. Stop me if you have heard this one before but according to certain people with direct knowledge of the negotiations, “The United States and China are moving closer to agreeing”. I mean seriously, WHO THE HELL IS STILL LISTENING TO THIS?! I really hope that someone with some advanced coding knowledge could somehow find a way to research how many articles have been written saying this EXACT same thing, and yet, we still don’t have a deal. We were lead to believe just a few weeks ago that “Phase 1” of the trade deal had been completed. Rightfully, markets jumped on the news, as it looked like we finally would have a reprieve from the constant overhang and threat of tariffs. But now, just a few weeks later, on a stage in London, President Trump stated we may not have a deal until after the 2020 elections. Again, rightfully, markets dropped sharply following the comments, which aren’t original at all, and something that has been repeated by both US and Chinese officials in the past. Which again brings me back to my question, who is listening to the news still? It is clear that we aren’t going to have a substantive deal at any point in the near future, let alone before the 2020 elections which are 11 months away. Furthermore, talks have been exacerbated by two bills which have recently passed the House of Representatives. The first, which passed both Chambers in Congress and was signed by President Trump, affirmed the rights of protestors in Hong Kong. The second of which is a bill that still has not totally passed through Congress would sanction Chinese officials for the human rights abuses against Uighur Muslims in the Country. Both these bills would be direct attacks against Beijing, and pose a serious threat to negotiations between the two groups. But for now, as investors, there is nothing we can do but sit, wait, and pray that an announcement doesn’t catch you with your pants down.