Trump’s weekend trade rhetoric proves contradictory Yields broke out of a long-term slide to start a new uptrend; dollar follows suit Oil extends short-term uptrend
Investor sentiment regarding a settlement of the U.S.-Sino trade war has been whipsawed over the past two days, by contradictory headlines about progress toward an interim deal. Though U.S. President Donald Trump has characterized the situation as he is, at the same time, also insisting a settlement will only be inked if it’s the right deal for the U.S.
Without real clarity on the situation, expect markets to fluctuate in the week ahead. Risk assets such as stocks and commodities could easily drop, while safe havens such as Treasurys, the and gold might jump, as trading opens on Monday.
Equities Finish Higher, But Uncertainty Grows During Weekend
U.S. indices, including the , and , ended the week higher, with the finishing at a new all-time high, driven by reports indicating a path toward a trade resolution was in the works. As a result, yields climbed to the highest since July and the dollar advanced to mid-October levels.
Over the weekend, however, uncertainty increased, a consequence of Trump’s own diametric rhetoric. The president characterized the Asian competition’s supply chain as “broken like an egg,” even as he assured the media talks were going well.
Trump denied the Chinese report that he’d agreed to start phasing out tariffs. But he also reiterated he’d be open to a deal, but only if it were appropriate for the U.S. All of which puts into question the continuation of Friday’s S&P record-setting, upward trajectory.
Nevertheless, the fact that investors were comfortable holding onto the most expensive stocks in history over the weekend, despite the possibility of unsettling news, is a testament to their confidence. Perhaps they believe that one way