More saber rattling between China and the U.S. did little to distract the market.
On Tuesday, President Donald Trump reiterated his hard-line stance on China during a news conference with Polish President Andrzej Duda and said the U.S. had “no choice” but to levy another $267 billion in duties on China. That would come on top of announced tariffs on about $200 billion in Chinese goods announced late Monday. China responded with tariffs of 5% to 10% on $60 billion worth of U.S. products that will take effect Sept. 24, and said it may introduce more measures if the U.S. goes ahead with higher tariffs.
This seems to be the prevailing thought process, hence after the initial hang wringing Wall Street doesn’t seem too concerned anymore:
“In my opinion, I see President Trump as trying to force the trading partners to the bargaining table to renegotiate trade deals that have long favored other countries over the U.S. His methods are unconventional but the U.S. economy is strong, earnings are healthy and confidence among consumers and investors remains high,” wrote Robert Pavlik, chief investment strategist at SlateStone Wealth, in a note to clients.
“We could be near peak political trade rhetoric, but without any visible effect on economic data, investors are just looking through the noise. We’re essentially still in a negotiation phase, and until we have set policies that we can evaluate, markets will continue to ignore this to a certain extent,” said Matt Forester, chief investment officer of BNY Mellon’s Lockwood Advisors.
Interesting reversal this week in the Chinese market – especially late in the week.Continue reading