Was the US Stock Market Pricing in a US-China Trade Deal?

in markets •  8 months ago  (edited)

China recently went public with their ultimatum that if the Trump tariffs are not lifted, then there will be no deal whatsoever. This isn't breaking news, as rumors coming out of China have said as much for weeks now, but the US Stock market was buying the rumor, and now they're selling the news.

The Indices clearly show this news hitting the markets. The Dow was aiming to hit a new all-time high of ~28600 before the official news hit.

Dow Jones Index (1-day increments)

What does this mean for the US stock market? Well, if a trade deal was being priced in, it certainly is not going to be priced in going forward. If stocks start climbing again, then that is confirmation that nothing is organic in the markets, and therefore there is no foundation holding anything up. The Fed can participate all it wants in the markets like Japan does with its own stock markets, but rising stocks due to manipulation cannot keep ahead of the devaluation of the US Dollar that would result, which means zero or negative growth in order to keep the economic engine running.

The thing is, if the US wants to keep up with China then the US will need a new "China" to manufacture goods for cheap, or Americans themselves will need to adopt the same quality of life as Chinese people do, and accept slave wages to produce goods at home. Any other options are not sustainable. People from Mexico are willing to work those jobs for sub-par wages, but half of the US don't want immigrants taking their jobs, so that's not going to be sustainable either without more Red hats complaining about immigrants.

December 15th is when Trump tariffs will be increased, unless Trump capitulates to China. He's screwed either way though, and its his trade war that he started with China, so it will be his to own (and no doubt spin to the public). Trump is trying to use the "Re-elect me and I'll get it done in the next term" BS, but you have to be a complete idiot to buy that nonsense. There's only so much time left where burying one's head in the sand is possible, and we're seeing that time come to an end.

Thanks for stopping by.

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Thanks for sharing your thoughts. This is a nice piece.
Can't argue with that.

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Personally I think it's all staged propaganda. The stock market didn't hit an all time high because they didn't want it to, keeping inflation in check would be my guess. Just like I think sometime shortly after Christmas Kim Jung Un will say something crazy like he did last year to make gas prices spike a bit, bring them back up to just slightly over or around the three dollar mark. The economy of all countries is so fragile it's a careful manipulation game to keep it stable.