Woke this morning to a string of tweets from Trump hammering China, literally on the first day of the first in-person negotiations to take place since talks broke down in May. Being that he’s going there this morning suggests to me that the preliminary read from the U.S. team is not good, and that Trump sees things potentially going south.
Trump has to be making a purely political calculation here; I mean he has to have learned by now that verbally browbeating (deservedly or not) the leaders of the world’s second largest economy in the hopes of garnering a favorable trade deal simply isn’t going to work. It’s a very dangerous game to play, as, while it may indeed play well to his base, it is bound to play utter havoc with financial markets already on edge due to the slowing global economy.
The Dow dipped a hundred points at the open, could’ve been much worse (will be if this is a harbinger of things to come)! Save for the immediate response to Trump’s tweets this morning, the market is intensely focused on the Fed tomorrow, earnings throughout the week and (among other data in the meantime) the jobs number on Friday.