Here We Go Again

Another day, another after-hours ramp on trade deal rumours…

This time, the news is out of China.  Last night’s news, however, was more convoluted than usual.

China says that it has agreed with the US to remove tariffs in phases.  But, it also said that the deal would require that both countries simultaneously cancel tariffs on each other’s goods in order to reach a “phase one” deal.

The China spokesman said the proportion of tariffs canceled for both sides must be the same, but the number to be canceled can be negotiated. “In the past two weeks, the lead negotiators from both sides have had serious and constructive discussions on resolving various core concerns appropriately. Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations.”

Maybe it’s just me, but that does not sound like a deal is in place – phase one or otherwise.  In fact, it sounds exactly like the type of news blurb which would have been released months ago: “We’re working on it.”

But, please, don’t bother the machines with the deets.  ES made new highs……while VIX has collapsed again (to its previous lows of course)…  …USDJPY has popped up past its SMA200 again…and, CL has topped its SMA200 again. These are repeats of moves that have all previously failed. But, hey, we have new highs in the S&P500!  So, what’s not to love?

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