Something doesn’t smell so good with today’s rally.
After last week’s sell-off, futures are higher across the board this morning. Dow futures are up 204. NASDAQ futures are up 58. S&P 500 futures are up 16. All as President Trump said “China called last night our top trade people and said let’s get back to the table.”
However, according to the Foreign Ministry of Beijing, they aren’t aware of any weekend phone calls. Then, just this morning, even China’s Global Times editor in chief tweeted, “Based I what I know, Chinese and US top negotiators didn’t hold phone calls in recent days.”
They added China did not change its position. “China won’t cave to US pressure.”
China is Hoping for a Resolution with “Calm” Negotiations
However, China did say it is willing to resolve the trade dispute through “calm” negotiations and resolutely opposes the escalation of conflict, said Vice Premier Liu He, as quoted by Reuters. “We believe that the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world.”
All of this follows an incredible escalation of conflict from last week.
That’s when Trump noted that the 25% tariffs on $250 billion worth of Chinese imports would rise to 30% by October 1, 2019. Separately, the remaining $300 billion worth of imports will be tariffed at 15% instead of 10% by September 1, 2019.
“Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer,” he tweeted.“As President, I can no longer allow this to happen!”
Until there’s further clarification on what is going on, stay safe. Hedge for volatility. And don’t run away from a market that has historically been resilient.