President Xi Talks Progress

President Xi Talks Progress

According to state media, the Chinese president told US Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer that Beijing talks have made progress

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Chinese President Xi Jinping said on Friday that trade talks with the United States will continue in Washington next week and that he hopes the two sides will be able to reach a mutually beneficial deal in the upcoming negotiations according to the official state-run press agency in China, the Xinhua News Agency. Xi said during a meeting with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin that talks in Beijing this week made progress and that China is willing to solve economic and trade disputes with the United States via cooperation. According to the report, Mnuchin and Lighthizer told the Chinese President that they maintain hope although there is still much work to be done and that they are willing to work with China to reach a deal that is in line with the interests of both countries. The S&P500, the Dow and the NASDAQ seem to welcome the report, as futures are up at the time of this writing, which is significant given the retail sales debacle from yesterday showing the weakest December selling season in 9 years.

A deal is critical

As economic cracks start to present themselves in both countries (not to mention The EU and the UK),  a U.S./China trade deal becomes critical to the survival of the bull market. As of last Friday, 85% of the companies that released forward guidance as part of their earnings reports released negative guidance, while 15% reported positive.  It’s important to note that most companies release no guidance at all, but the ones that did were decidedly negative and the majority of those mentioned trade tensions with China as one of the reasons. All deal is now not only good news, but it’s also needed news. 

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