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All Trump’s announcements on China were rumored or reported. Market breathes a sign of relief

Nothing new here

Nothing new here
Markets shuddered early in Trump’s talk because there was a lot of sound and fury but when he got to the actual policies, there was nothing new.
It’s a series of studies and minor measures. Every one of them was rumored, leaked or reported ahead of time.
China

Trump lambastes Twitter, says it is doing nothing about the lies and propaganda from China

Trump tweets out more criticism against Twitter

Twitter is doing nothing about all of the lies & propaganda being put out by China or the Radical Left Democrat Party. They have targeted Republicans, Conservatives & the President of the United States. Section 230 should be revoked by Congress. Until then, it will be regulated!

And so the drama continues to unfold. Once again, just be mindful of the situation here in case it creates further negative spillovers for tech stocks in general.

US-China trade war. War of words heating up – a reminder of where tariffs are

US President Trump and others in his administration have once again been ramping up anti-China rhetoric.

Which has brought the trade war back into focus. Currently we are at a ‘phase 1’ agreement (of many more to come potentially, phase 1 barely scratched the surface). With Trump’s blaming China, for pretty much anything and everything it seems, it raises the prospect of little progress ahead on trade issues. And with the US election to come in November its likely Trump will continue to aim belligerence at China.
Via the Peterson Institute for International Economics (PIIE) a representation of where tariffs are, in summary:
US President Trump and others in his administration have once again been ramping up anti-China rhetoric.
Keep on eye out for progress, though I do not expect any. Escalation of the trade war is a negative for ‘risk’ (we saw this last week with a drop in, for example, the AUD) as Trump’s bellicose comments gained market attention once again.

Deteriorating US-China relationship in focus as New York begins the week

It’s non-farm payrolls week

It's non-farm payrolls week
Friday’s jobs report is the highlight of the week but for today it’s all about the relationship between the world’s two largest economies.
The US has been floating the idea of reparations and took it a step further on Sunday in this bizarre exchange with Secretary of State Mike Pompeo on ABC:

RADDATZ: Do you believe it was manmade or genetically modified?

POMPEO: Look, the best experts so far seem to think it was manmade. I have no reason to disbelieve that at this point.

RADDATZ: Your — your Office of the DNI says the consensus, the scientific consensus was not manmade or genetically modified.

POMPEO: That’s right. I — I — I agree with that. Yes. I’ve — I’ve seen their analysis. I’ve seen the summary that you saw that was released publicly. I have no reason to doubt that that is accurate at this point.

RADDATZ: OK, so just to be clear, you do not think it was manmade or genetically modified?

POMPEO: I’ve seen what the intelligence community has said. I have no reason to believe that they’ve got it wrong.

To be clear, you’re accusing China of a heinous crime against humanity and you can’t see to get your story straight?
That’s not going to go over well in China but the exact response this time is less important that the trajectory. If it wasn’t entirely clear before, we’re headed towards a decoupling between the US and China and potentially something worse.
Trump also went down that road but said it was a mistake and promised ‘a very strong report’ will be delivered ‘soon’.
“Personally I think [China] made a horrible mistake. They tried to cover it up. It’s really like [they were] trying to put out a fire. They couldn’t put out the fire,” Trump said.
He also threatened new tariffs if China can’t complete the Phase 1 deal.
“We’re going to have to see what’s going on [with the purchases] because of what happened,” said Trump. “They took advantage of our country. Now they have to buy and, if they don’t buy, we will terminate the deal. Very simple.”
S&P 500 futures are down 20 points after an 81-point fall on Friday.
In terms of the economic calendar, the lone potential market mover is factory orders at 1400 GMT.

US President Trump re hydroxychloroquine drug – “strong signs” it works on the coronavirus

White House press briefing on coronavirus, Trump remarks

  • Trump says they’ve bought a “tremendous amount” of hydroxychloroquine
  • claims there are “strong signs” it works on the coronavirus
Trump says has a bought 29m doses of the drug
Note:
Anthony Fauci, America’s most respected infectious disease expert, and others emphasize that it hasn’t been proven safe/effective
Fauci pictured here behind Trump at an earlier briefing.
White House press briefing on coronavirus, Trump remarks  

Trump drops idea of New York lockdown as U.S. death count crosses 2,000

President Donald Trump said on Saturday that he would issue a travel warning for the hard-hit New York area to limit the spread of the coronavirus, backing off from an earlier suggestion that he might try to cut off the region entirely.

“A quarantine will not be necessary,” he said on Twitter.

Trump’s announcement came as the U.S. death count crossed 2,100, more than double the level from two days ago. The United States has now recorded more than 122,000 cases of the respiratory virus, the most of any country in the world.

Since the virus first appeared in the United States in late January, Trump has vacillated between playing down the risks of infection and urging Americans to take steps to slow its spread.

Trump said on Saturday afternoon that he might impose a ban on travel in and out of New York and parts of New Jersey and Connecticut, the U.S. epicenter of the disease, to protect other states that have yet to bear the brunt. He offered few specifics.

Critics promptly called the idea unworkable, saying it would cause chaos in a region that serves as the economic engine of the eastern United States, accounting for 10 percent of the population and 12 percent of GDP. (more…)

US stocks jump in a monster bounce — Dow gains most since 1933

The Fed and Congress inspire an equity rally

Closing changes:
  • S&P 500 +9.4% — biggest since 2008
  • DJIA +11.3%
  • Nasdaq +8.0%
It was a great day to buy stocks as the market bets that Congress will come through with some kind of stimulus. There was also some major bargain hunting and short-covering. The four best performers on the S&P 500 were: L Brands, American Airlines, MGM Resorts, Norwegian Cruise Lines. Energy was the top-performing sector.
Every bottom starts with a bounce but not every bounce is a bottom. That said, bottoms are built on skepticism so my skepticism is only adding fuel to the fire.
The rally today is slightly bigger than the one that led Trump to email out this:
The Fed and Congress inspire an equity rally

White House says US President Trump coronavirus test result was negative

A statement from Sean Conley, Trump’s doctor.

This is good news if true. Trump in known as a bit of a germaphobe so his caution may have paid off. Wash your hands folks!
In other news, the wife of Spain’s Prime Minister has tested positive.
A statement from Sean Conley, Trump's doctor.

US President Trump says the coronavirus will probably spread in the US

President of the United States Trump press conference

  • Says virus will probably spread in the US
There is no probably about it. I am surprised he is not informed on this.
More:
  • May need to restrict travel from Italy, South Korea but now is not the right time
S&P500 futures lower again, getting sold heavily on Globex

UK PM Boris Johnson speaks with China President Xi – says “I love China” (or did he?)

Chinese state media reports that BJ proclaimed his love for China in his phone call with Xi, which came just days after US President Trump threatened BJ over Huawei

You’ll recall the UK is OK with granting sensitive contracts to Huawei despite Trump’s opposition.
On the love, South China Morning Post says:
  • Johnson displayed a cosiness with Beijing that contrasts with his hardline approach to the European Union amid Brexit trade talks.
(SCMP link is here for more)
More:
“Britain welcomes investment from Chinese companies,” Johnson told Xi, according to Chinese state broadcaster CCTV. “We would like to strengthen our cooperation with China under the Belt and Road Initiative.”
Putin, Trump, Xi, Johnson.
Sheesh.
Keeping track of who owns who is getting complicated.
Chinese state media reports that BJ proclaimed his love for China in his phone call with Xi, which came just days after US President Trump threatened BJ over Huawei