Week In Review – January 18

Better late than never.  The markets are closed today, not much goin’ on.


  • The risk markets still in bounce mode, led by emerging
  • The U.S. bank index up big for the week
  • Energy and biotech continue to ramp

Commentary – Getting up into for sale territory but need a catalyst to move lower.

Waiting on China deal, which should be a sell the news event, and another Potemkin Village, just as we expected.

WASHINGTON — As a critical round of talks with China kicks off next week, the Trump administration is increasingly pessimistic that Beijing will make the kind of deep structural changes to its economy that the United States wants as part of a comprehensive trade agreement, according to officials involved with the talks.

The United States is now weighing whether large Chinese purchases of American goods and more modest economic changes will be enough for a deal to end a damaging trade war between the two nations and help calm volatile markets. 

A Chinese delegation led by Liu He, China’s vice premier, will meet with Robert Lighthizer, the Trump administration’s top trade negotiator, and Steven Mnuchin, the Treasury secretary, on Jan. 30 and 31. The two countries are racing to strike an agreement by March 2, a deadline set by President Trump and President Xi Jinping of China.  NY Times, Jan 21th

Mnuchin and Malpass are in way over their heads and outmatched by these guys.

And this nonsense,

Pleaaaazzzeeee.  Xi is not obsessed with every tick in the S&P  Shanghai and oversees a command economy not subject to market discipline.  The Chinese negotiators know it.

But Mr. Trump is also under pressure and the window for him to use market-rattling tariffs as leverage is likely to shrink as his re-election campaign heats up next year.

“The damage to U.S. business, consumers and exporters is real and ongoing,” Scott Lincicome, a trade lawyer and scholar at the Cato Institute, said, noting that the risks of this approach only increased if negotiations with China dragged into 2020. “If you’re the Chinese, delay is your best friend.”  – NY Times, Jan 21st

Expectations are waaay too high for a “good” China deal.  At best a “fake deal” as in Potemkin.

Look to the government shutdown as your template as to how Trump and the White House paint themselves into a negotiating corner.

The will be blood sellers.  Count us in.




Check out 2019 v 2018 in Country ETF land.


2018 Year-End: Only Three Country ETFs w/ Positive Return





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