President Donald Trump says China wants a deal, but Wall Street is not entirely convinced that there will be one, even though the shares have risen with the President's remarks on Wednesday.
Keon said the market believed a deal came this week, based on comments from US officials. When Trump tweeted for the first time on the weekend that he could raise tariffs on Chinese goods, it was a surprise.
"That was market consensus, a deal would be made I have taken a somewhat more defensive position in our portfolios," he said. "If it works this week we'll probably go back to last Friday, I'd say a plus of 2% versus a 1
Equities sold this week on concerns include an increase in tariffs to $ 200 billion for Chinese commodities to 25% from 10% of the world harm the economy and reduce corporate profits. The S & P 500 lost 2% on Monday and Tuesday. China said Wednesday it would take countermeasures if the US raised duties.
Dan Clifton, Director of Policy Research at Strategas Research, said he believes that the main problem in the talks has been on tariffs and whether they will survive a deal.
"The US wants some tariffs to stay in place to make sure that China complies with the full agreement, and China relinquishes other obligations because of US duty All is interconnected Well, Trump is offering China tariffs of 50 billion Dollars or $ 500 billion in goods, the ball is in front of China's court, Liu is coming to the US, a confirmation that negotiations will take place, "said Clifton.
Marc Chandler, Chief Bannockburn Global Forex Market Strategist Global Forex said the dollar had been slightly weakened after Sanders's statement on China, but it was not yet clear how the talks would end after the vice premier on Thursday had come to the talks.
I say that's very precarious. And you still get the turn of the USA, "said Chandler. I think tomorrow is a wild card. "
" What many US press misses is Vice Premier Liu. He comes one day later than originally planned, and he has a smaller delegation, "said Chandler.
Luke Tilley, chief economist at the Wilmington Trust, said he expects a deal, even if it's not sealed this week." We are not surprised that there are bumps because we come to what seems to be the end, "he said, but if there is an increase in tariffs, this would be a concern.
" The economy can Escalation can cope with 25%. What we really fear is an escalation afterwards. The remainder of the goods would be geared directly to consumer goods and would affect consumer spending and prices much more than the first two rounds, "he said.
Jack Ablin, Cress of Cresset Wealth CIO, said he did not have one due to the trade dispute He did not take any money off of the recent tariff threats, and if the talks fell apart he would reevaluate positioning.
"We played small-cap US and emerging markets, hoping to make a deal. "Emerging" will perform well when there is a deal, and if that is not the case, small caps will outperform the outperformance. "Small-cap business revenues are usually more dependent on the performance of the US economy than the global economy.
I just think investors underestimate the scope of this deal we are trying to do, unfortunately I do not think it's a binary result, "said Ablin." They shake hands, but there will still be issues that are likely to remain unresolved. It's great to have something behind us and we certainly do not want to see these fares. I believe that this is a competition for economic dominance in technology and healthcare, and I am not sure that this will be resolved by certain trade negotiations. "