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Home / World / Markets are longing for good news about a trade agreement between the US and China

Markets are longing for good news about a trade agreement between the US and China



President Donald Trump and Chinese President Xi Jinping talk on the terrace of Mar-a-Lago Estate on April 7, 2017 after a bilateral meeting in Palm Beach, Florida, USA.

Carlos Barria | Reuters

Since President Donald Trump said he and President Xi Jinping are meeting to sign a trade agreement, Wall Street has stuck to any speculative word about where and when this signing could take place.

So it was not surprising When the shares were sold Wednesday morning, a Reuters headline said Trump's government sources said the first deal could be postponed until December and that Europe was a likely trading center. CNBC confirmed the report.

A November deal was expected, and there were reports that an American site such as Iowa, as proposed by the government, or Alaska and Hawaii, as proposed by China, was being considered. An absolute deadline for a deal would be December 1

5, the day a new customs round for Chinese goods enters into force.

Equities were bullish on trade progress, but weakened in the last two sessions as the market digested recent gains to new highs and no news on the trading front. Trump and Xi were expected to sign the agreement in Chile on the sidelines of the APEC meeting, but Chile announced last week that it could not host the meeting on 16 November due to protests in that country.

19659008] "We've basically used up the good news, and we're in this time of needing a booster vaccine, so we need some news that keeps us going," said Art Cashin, director of the NYSE Floor Operations at UBS.

Art Hogan, chief market strategist at National Securities, said investors are looking forward to details of the signing. "Once you find the place, give it an appointment, things will be signed, and we're leaving, which would eliminate much of the headwind," he said.

Hogan said investors wanted to see a first deal that involved Stop the escalation of tariffs and the possible rollback of others. "If you stop the escalation, the economy will be safer again, and you might even get some investments that were missing in the last 18 months," he said.

Cashin said the market was not worried about where the meeting was taking place, but the report on the timing was crucial, as the longer the talks last, the greater the likelihood of a problem. Cashin said he does not think Xi would come to a meeting in the US because it might look like he was trumping Trump. They did not come to the US and put up a list of possible trading results.

"President Xi will not come to the US – not to Iowa, Hawaii, Alaska, DC, or anywhere – no" state visit. "Unpredictable" (Trump) risk precludes this. Mistrust dominates, "the Evercore strategists said." The preliminary # 1 phase is not enough to order signatures from the president. We look forward to a ministerial signing. "

Currently, Evercore sees only three points of agreement, and China's call for rollback of existing tariffs is not one of them, with a delay in tariffs on 15 December, agricultural sales to China and China Chinese financial markets continue to open up

Other political strategists believe that agreement will be reached, including agricultural sales to China and blackmail allegations for Chinese telecommunications companies in the US Huawei, said Dan Clifton, head of policy research at Strategas "Liquefied natural gas exports have again been part of the discussion, and a source close to the discussions said CNBC energy is part of the first phase talks."

"Catastrophic to both sides & # 39; [19659015] "We are at the bottom and at the end of the discussions there is volatility," said Clifton. "But the cost An explosion here would be catastrophic for both sides. I think you have a 15% chance of an explosion. We're really trying to move the Rubic Cube so both sides can go away and declare victory.

Tom Block, a Washington strategist at Fundstrat, said a deal was about to be concluded and Trump may not need a signing ceremony as much as the opportunity to give a speech on the deal's success.

"Whether it's completed I do not think that's as important as getting involved in a deal, "Block said.

Clifton said The Trump administration is anxious to reach an agreement on the weakening economy, but also China Worried about rising food costs and export losses, he said that a deal will be made regardless of whether Trump and Xi meet.

"I think everyone gives each other an exit ramp. I feel like both sides are preparing to sell their local audience a deal. That's why I believe there will be a deal, "he said.

Clifton said Trump's re-election efforts were a factor, with Secretary of Commerce Wilbur Ross surprisingly announcing last weekend that he does not expect the US to price European cars Europe should be the next front in the trade wars of the government.

"This is a fundamental change in policy. Nobody in the administration is being asked to give car rates, "Clifton said," What you see is that the president does not want to impose any additional tariffs before the elections. This should be a guide to China. "

– Kayla Tausche of CNBC contributed to this review.


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