The US stock market has been riding a wave of optimism stemming from optimism about a swift resolution to the ongoing US-China trade talks. However, President Donald Trump’s comments are now swinging from a “good chance” of an immediate deal to claims that he is “not in a hurry” to make one. Meanwhile, reports are breaking that further meetings between Washington and Beijing won’t happen until April, at the earliest, and the US stock market is not taking the news well.
Bloomberg broke the news that the much-anticipated meeting between Donald Trump and Xi Jinping would not take place until April – at the earliest – leading to a visible skid in the Dow futures market on Thursday morning.
Bloomberg , citing three sources, reported that the meeting between Trump and Xi Jinping wouldn’t happen in March – this despite earlier reports of an upcoming resolution that would scrub the threat of no-deal tariff hikes threatening both the US and Chinese economies.
One source predicts the meeting won’t happen until the end of April, “if it happens at all.” China is reportedly also pushing for a formal state visit, which could indicate that there is still much to discuss. This is supported by U.S Trade Representative Robert Lighthizer’s recent comments that “major issues” are outstanding.
Concerns over the trade war have thwarted the US stock market’s latest recovery attempt.
Former White House economic advisor Gary Cohn has spoken out on the impact of tariffs and a chaotic US administration. Cohn even suggests that Trump is secretly “desperate” for a positive trade resolution.
Jason Pride, chief investment officer at Glenmede, says optimism is “fading” as a trade deal looks increasingly out of reach. He adds:
“The prospect for an imminent deal, which the market appeared to have priced in, has waned in the short-run.”
Still, Chinese analyst Daniel So of CMB International Securities, says:
“Even though Trump said he is not in a hurry to reach a deal with China, his tone was still positive. So markets are not worried.”
Meanwhile, Donald Trump, without his usual positive US-China trade-talk rhetoric to boost the markets, is touting the prospects of a trade deal in another part of the world – the United Kingdom.
“My Administration looks forward to negotiating a large scale Trade Deal with the United Kingdom. The potential is unlimited!”
The Brexit debacle continues to weigh heavily on global markets. Nevertheless, the Stoxx 600 Index and UK market both climbed on Thursday. The FTSE 100 is up 0.48% as of the time of writing.
China’s stock market, meanwhile, fell back today on new data which shows industrial output in the country has declined from 5.7% in December to 5.3% in January and February. The Shanghai Composite Index fell 1.2%, and the ChiNext index dipped 2.6%.
Back in the US, the S&P 500 is down 0.05% and the Nasdaq 0.13% about 75 minutes after the opening bell. The Dow, for its part, has lost 23 points for a session decline of 0.09%.