In a rush? Here’s the key takeaway
- President Trump is out on Twitter right now as I finalise this morning’s report talking up his trade deal and the signing of this Phase 1 which will happen soon he says. For mine, while I respect the big pullback in the S&P on Friday from 3000ish to close at 2970 as a warning, my sense is the President and Chinese both will try to change the narrative around trade between now and when Presidents Trump and Xi meet next month.
- If that is the case then after some sort of retest of the break stocks and risk assets are likely to regain a solid bid tone. That will be good for assets like the Aussie dollar, global stocks, copper, and EM currencies – among others – but not so hot for global bonds which look like they have further to run with the US 10 year treasury on track for a run at 2% it seems.
- Yes, we’ve been here before and markets are right to be skeptical that the mercurial Donald Trump doesn’t simply change his mind again. But he clearly thinks a strong economy, healthy stock market returns, and positive sentiment to growth will insulate him from the trouble that lies in wait during the impeachment investigation and then Senate trail to follow. So as stupid as I may look in a day or a week I’m betting there will be a narrative change for a while before the reality that it wasn’t just the trade war which hit global growth comes back to blindside the market.
Now, let’s dive in to this morning’s newsletter.
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