ES Journal - 2019/2020
- Thread starter Buy1Sell2
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The mini-trade deal, as uneventful as it was, is all but dead, the probability of ever reaching agreement on the core issue of IP protection and free access to Chinese markets is practically zero. China has shown its cards. All the hype on a tweet that a "deal is close" is media BS that plays the retail investor like a yo-yo... IN on good tweets, OUT on a bad report... it's all BS... the US economy is fine with or without a deal.
If other factors bring US markets down below 26,700ish (DOW), they might keep going as a correction is due, however, it won't be trade causing a correction.
Not if you're a farmer. The US Economy will eventually feel the effects of the trade war....it will just take more time. Trump is hoping the time-frame for this is after the election.
Trump said that much of the tariffs collected is going to the farmers, if true, the farmers are also fine. Besides, China needs produce, they will buy again when they don't need to prove a point.
The effect on the economy is the paralysing effect of uncertainty and indecision, this is holding back expansion. Trade itself is insignificant. Once CEOs have a clear road map to follow (i.e. Trump stops being impulsive, use the threat of tariffs for everything as he did for Mexico, Canada, EU, India, etc, or Trump leaves office) they can leap-frog China and carry-on expanding. There is nothing China can offer that can't be got elsewhere or done in the US itself... as shown by Toyota, Mercedes, Samsung, Lenovo, etc... its rather shameful that APPLE goes to China to build phones while a Samsung, Lenovo, etc come to the US to build them... It's all a matter of choice, not a necessity.
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This point is easily disproven by soaring bk's in the farming sector. Yes, they began prior to the Tariff War, but have continued unabated.
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