Wall Street’s three-day rally came to an end overnight after Bloomberg reported any signing of the U.S.-China trade deal would be delayed until April. The fact it wasn’t an official announcement likely explains the shallowness of the Wall Street pull back. As delays go, a couple of months is a minor irritation in the quest for macro-economic clarity, not a “deal-breaker.” Just ask the British after one centimetre of snow falls at Heathrow, or two years of Brexit negotiations. Now those are proper delays.
Speaking of delays, U.K. Prime Minister Theresa May finally won a vote in her own Parliament. The Commons backed her proposal for a yet another meaningful vote next Tuesday. The Faustian bargain being that if Parliament votes for the Brexit deal they voted down on Monday she will ask for a three-month extension. If they vote it down again, she will ask the European Union (EU) for a very long delay, possibly more than a year. Right now, a centimetre of snow at Heathrow is looking like a wonderful alternative.
Speaking of the EU, President Trump told the Irish Prime Minister Leo Varadkar on a visit to America, that the U.S. could cause the EU “pretty severe” economic pain if the EU did not engage with the U.S. on trade talks. It will no doubt take the froth of Varadkar’s upcoming St. Patrick’s Weekend but reinforces my previous point. Potential trade wars will not end with China. Trump’s tariff turret will swing towards Europe. Like many a general before him, he is not scared of fighting a war on two fronts.
Following on from poor China data yesterday, the trade story should have seen equities wobble quite badly, but stocks have proven remarkably resilient. The fell 0.1%, the Jones was flat, and the fell 0.16%. This