Sep 25, 2019

The market just wants a U.S.-China trade deal

Illustration: Sarah Grillo/Axios

Bullish stock traders have taken just about every opportunity to buy U.S. equities after positive news about developments in the U.S.-China trade war this year, but both the S&P 500 and Nasdaq had their worst day in a month on Tuesday as obstacles to that deal mounted.

What's happening: Stocks reversed earlier gains after President Trump addressed the UN and accused China of failing to keep its promises and engaging in predatory practices that had cost millions of jobs in the U.S. and other countries.

  • "Trump's comments to the U.N. were very antagonistic toward China. In the last couple of weeks there's been optimism trade would go in a positive direction," Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, told Reuters.
  • "It was the tone and the fact he listed out in great detail all the gripes the U.S. has with China."
  • "All that trade optimism that's been building has been sucked out of the air and replaced with pessimism."

U.S. stocks fell further after Congressman John Lewis committed his support for impeachment proceedings based on reports Trump pressured Ukraine's president to investigate former Vice President Joe Biden and his son by withholding U.S. aid.

  • “This is going to be news that spills out over time, but I can’t imagine the start of this process improves the tone of the U.S.-China trade talks … if I’m China I feel empowered," Art Hogan, chief market strategist at National Securities, told CNBC.
  • "This is a market that’s been hanging on that tone getting better and I think it just got worse on the president’s hawkish tone at the UN and this process."

Where it stands: The impeachment inquiry House Speaker Nancy Pelosi announced Tuesday doesn't realistically portend a Trump exit from the White House, but it does further cloud what the market can expect from government policy, said Marc Chandler, global market strategist at Bannockburn Global Forex.

  • “My sense is the impeachment is well ahead of the country. I don’t think it’s going to be successful, and ... I don’t think the country is behind it. It just adds to uncertainty,” Chandler wrote in a note.

Go deeper: China cancels U.S. farm visits while Trump holds out for a "big deal"

Go deeper

Trump says U.S. and China reach partial trade agreement

Illustration: Axios Visuals

President Trump said the U.S. and China reached a partial trade deal on Friday that included an agreement from the U.S. to suspend a planned 30% tariff spike on Oct. 15, while China will buy $40-50 billion worth of U.S. agricultural goods.

Why it matters: The ceasefire comes as the U.S. economy is showing signs of weakness as a result of the trade war — threatening the economic gains Trump has counted on to carry him to re-election in 2020.

Go deeperArrowOct 11, 2019

Trump's promises on "phase 1" deal with China fall flat

President Trump and China's President Xi Jinping, Nov. 2017. Photo: Nicolas Asfouri/Getty Images

It's been a week since President Trump touted his "phase 1" partial trade agreement with China as the greatest-ever deal for U.S. farmers — but China isn't endorsing his promises.

Where it stands: China has not confirmed Trump's claim that it will buy $40 billion–$50 billion worth of U.S. agricultural goods, and it says a final deal would require the U.S. to cancel all existing and future tariffs, CNBC reports. No final decision has been reached to determine if the U.S. will push tariff increases scheduled for Dec. 15.

Go deeperArrowOct 17, 2019

An inflection point for the market

The market's ebullient mood has soured as September comes to a close and stock traders seem to have lost the risk appetite that had been pushing equities back toward all-time highs.

Why it matters: This week will likely provide an inflection point that will drive the market through the Q3 earnings season, which picks up in mid-October, and could last through the Fed's meeting on Oct. 30.

Go deeperArrowSep 30, 2019