The Celeri Journal #85: Lights Out

Written by Michael

On May 29, 2020

Global Markets Recap

Suddenly, equities are taking a breather as POTUS announced a press conference on China tomorrow.

You wonder what he’ll want to discuss & how investors will interpret his remarks. Recall, while this year has been singularly about COVID-19, only a year ago the only topic any hedge-fund manager gave a hoot about was the China trade deal – which, when it finally got signed propelled US stocks to all-time highs.

What might Mr. Trump want to discuss tomorrow & how will the market views those remarks – bullish or bearish. Let’s examine:

  • Formally blame China for faulty coronavirus reportage &seek remedies: Hyper-bearish
  • Suspension of Trade Deal: Lights Out
  • Say the end is nigh for Hong Kong autonomy & slap on trade sanctions: Mildly-hyper-bearish
  • Announce we sent 2 warships (which we did) to the South China seas: Bearish
  • Tell the world POTUS will mediate the border spat between Beijing & Delhi: Mildly bullish
  • Declare his plan to repatriate US manufacturing companies home from China & shower them with tax breaks: Bullish
  • A resolution on Huwaei & cyber-spying: Hyper-bullish. Odds: 1 in 100 billion.

There you have it. As Ray Dalio keeps noting: the U.S. & China seem on an inevitable collision course. Tomorrow’s White House press conference, then, is of extreme importance.

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