Monday we just want to get a sense of the fallout of this tit for tat tariff situation with China. I think that people believe that the president will be "rational" with trade, meaning there will be an accommodation that makes things go more smoothly and the tariffs are put off.
But the president thinks that's anything but rational. Listen to the wording of what he says on trade. He doesn't' per se call out the Chinese for taking advantage of our open borders and sending in goods to the point where we have a huge trade imbalance.
What he does say is that our previous leaders have allowed it to happen and he's breaking ranks with them because they were oblivious to the ongoing one-sided trade war where we didn't bother to put up our dukes.
There's some real confusion in the reporting on tariffs. I get the sense that there are investors who truly believe that these can be averted and the president wants to avert them because it hurts trade and hurts the stock market.
The president, on the other hand, believes that standing up to China is an imperative or they will run us over. He thinks, with the economy this good, with employment this strong, with profits this robust why not go for it.
Last night we heard that China might have approved the purchase of NXPI (NXPI) by Qualcomm (QCOM) . Today we heard that might be erroneous. If we come in on Monday and hear that the deal is done there will be a sense that China is sending a signal that it doesn't want any escalation beyond what's been done.
I think that if you get that signal it will not be listened to by President Trump even as it will send a positive message to Wall Street.
All I am asking you to do is recognize that the president is not trying to get the Dow to hit new highs. That was 2017's game.
He's now in it to fight back and the market won't like it any time he does.