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Trump relents on Huawei, Trade talks to resume, don't bank on a RALLY


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#1 dTraderB

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Posted 29 June 2019 - 05:12 AM

KICK THAT CAN  DOWN THE ROAD< never to be opened again until after 2020. 

 

Markets may rally a bit but other more important factors come into play.

 

3 % SPX rally? maybe.... suddenly, the focus will be elsewhere.

 

Trump Relents on Huawei in China Truce, Reviving Stalled Talks
  • President says China to buy ‘tremendous’ amounts of farm goods
  •  
    U.S. companies can supply Huawei despite blacklist, Trump says

https://www.bloomber...alks-china-says

 



#2 dTraderB

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Posted 29 June 2019 - 05:13 AM

They seem to be pleased, they got the better out of it but it is basically now a non-issue, China will push it to the edge with the previous trade 

practices:

 

This is a breakthrough. Chinese side said in the brief the two sides agreed to restart trade consultations based on equality and mutual respect. This is important to Chinese side. Hope the US side can keep this commitment in the following negotiations. This is the key.

10:16 PM - 28 Jun 2019


#3 dTraderB

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Posted 29 June 2019 - 05:21 AM

Trump agrees to allow sales of U.S. products to Huawei and to resume trade talks with China

 

https://www.cnbc.com...t-in-osaka.html



#4 Data

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Posted 29 June 2019 - 10:02 AM

Semiconductor companies lobbied for relief since their sales have dropped 30 percent in the last year.  Huawei is coming out with a new operating system and developing new chips.  The main constraint is that most of the leading chip manufacturing equipment makers are in the US, Taiwan, and Japan.



#5 trioderob

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Posted 29 June 2019 - 10:43 AM

Monday shall be a huge up day 



#6 typicalbear

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Posted 29 June 2019 - 11:30 AM

KICK THAT CAN  DOWN THE ROAD< never to be opened again until after 2020. 

 

Markets may rally a bit but other more important factors come into play.

 

3 % SPX rally? maybe.... suddenly, the focus will be elsewhere.

 

Trump Relents on Huawei in China Truce, Reviving Stalled Talks
  • President says China to buy ‘tremendous’ amounts of farm goods
  •  
    U.S. companies can supply Huawei despite blacklist, Trump says

https://www.bloomber...alks-china-says

 

 

They're going to use 'trade talks' to manipulate the market....FOREVER!



#7 dTraderB

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Posted 30 June 2019 - 07:05 AM

I would be shocked if market does not rally at least 50 SPX points but....

On second thoughts.... some are having: And, China continues to apply pressure:

 

China warns of long road ahead for deal with U.S. after ice-breaking talks

https://www.reuters....s-idUSKCN1TV01F

 

Marco RubioVerified account @marcorubio
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If President Trump has agreed to reverse recent sanctions against #Huawei he has made a catastrophic mistake. It will destroy the credibility of his administrations warnings about the threat posed by the company,no one will ever again take them seriously.



#8 dTraderB

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Posted 30 June 2019 - 07:07 AM

More trash talk from one of the unofficial official voice of China on twitter:

  1. Hu Xijin 胡锡进 Retweeted Marco Rubio

    Prominent existence of a Senator who is handsomely paid but always inciting hostility among countries, is really a tragedy of the US democratic system.

    Hu Xijin 胡锡进 added,

    Marco RubioVerified account @marcorubio
    If President Trump has in fact bargained away the recent restrictions on #Huawei, then we will have to get those restrictions put back in place through legislation.…
    69 replies24 retweets136 likes
    Reply
     69
     
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     24
     
     
    Like
     136
  2.  

    The US made big concessions? US companies selling equipment to Huawei is just going back to one and a half months ago; no new tariffs is going back half a month ago. China will actually buy more American goods and pay the cost of reforms. Some Americans still unsatisfied?

    101 replies83 retweets250 likes
    Reply
     101
     
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    Like
     250
  3.  

    This is a breakthrough. Chinese side said in the brief the two sides agreed to restart trade consultations based on equality and mutual respect. This is important to Chinese side. Hope the US side can keep this commitment in the following negotiations. This is the key.



#9 dTraderB

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Posted 30 June 2019 - 07:10 AM

Yeah, but still expect at least 2% until after July 4th

 

Market High from Trump-Xi Trade Truce May Not Last Semiconductor and agricultural related stocks should rally following President Trump’s benign meeting with China’s President Xi at the G-20, but the exuberance may be short-lived.
By 
Spencer Jakab
June 29, 2019 8:08 am ET
 

The Fourth of July fireworks will come a few days early this year for traders.

A number of assets, from tech stocks to commodities, are likely to react positively on Monday to the outcome of this weekend’s trade talks between President Trump and Chinese President Xi Jinping. Financial markets may not be quite as exuberant in coming days and weeks, though, as investors digest the longer-term implications of the meeting.

Heart of the DealSource: FactSet
%PHLX Semiconductor IndexVanEck Vectors Agribusiness ETFFeb. ’19AprilJune-10010203040

The most obvious winners from the summit’s aftermath will be U.S. technology companies with direct or indirect exposure to embattled Chinese telecom giant Huawei Technologies Co. In remarks following the meeting, Mr. Trump said that U.S. companies would be able to sell equipment to Huawei that has “not a great national-emergency problem with it.” Though the U.S. and other western nations may forgo buying allegedly compromised Huawei equipment, software and chip companies may keep supplying it. Expect the likes of Qualcomm, Intel, Nvidia , Advanced Micro DevicesAMD -1.20% and Broadcom AVGO 0.75% to rally sharply.

Another leg of the deal involves U.S. agricultural products. Mr. Trump said the Chinese had agreed to buy “tremendous amounts of food” and that “we’re going to give them a list.” The U.S. Department of Agriculture noted that China made a massive purchase of U.S. soybeans a day before the meeting. Expect futures markets to get a jolt with some benefit to companies such as Deere & Co. and The Mosaic Co. that supply them.

Stocks overall are likely to rise on the benign outcome of the talks. The question, though, is whether the gains will last, even for the sectors most likely to benefit. U.S. equity markets just closed out their best June in over 60 years and their best first half in over 20 largely on expectations that the Federal Reserve is set to come to the rescue with rate cuts. June began with a surprisingly weak U.S. payrolls number that, coupled with trade concerns and a slew of tepid U.S. manufacturing reports, has made a July rate cut a virtual certainty based on futures bets.

 

The tail may be wagging the dog, though—markets seem to care more about a dovish Fed than the reasons for it. Even following the catharsis from this weekend’s trade talks, it would still take a dramatically stronger June jobs figure this Friday to tip the scales in favor of standing pat at the Fed’s July meeting. Reduced tensions could certainly alter the prospects for another cut later in 2019, though.

 

Furthermore, recent signs of manufacturing weakness can’t all be chalked up to China uncertainty.

There has been a real slowdown already. The sharply inverted bond yield curve of recent months typically has presaged a recession, not just concern over a single disruptive issue on the horizon.

Even chip stocks and agricultural commodities could give back gains. The Philadelphia Semiconductor Index is up by nearly 28% this year despite the Huawei tensions amid mixed news such as weakness in data-center demand. In the longer run, U.S. threats to cripple telecommunication equipment companies ZTE and Huawei have given China a strong incentive to become self-sufficient in key technologies, which could ultimately hurt the business prospects of U.S. tech companies.

U.S. agricultural-equipment and service firms will welcome the reprieve with China, but the Farm Belt’s buying power has taken a hit recently from other concerns such as flooding. And agricultural commodities are fungible, meaning that a shift in Chinese buying to U.S. suppliers doesn’t mean an increase in overall demand world-wide. Indeed, the knock-on effects of China’s current swine-fever scare could depress demand for corn and soy globally.

Finally, tariffs on a quarter trillion of Chinese goods remain in place and those on an additional $325 billion aren’t off the table. The most fundamental issues such as intellectual property protection remain unresolved. This means existing frictions and general uncertainty will keep acting as sand in the gears of global growth.

Write to Spencer Jakab at spencer.jakab@wsj.com

https://www.wsj.com/...ast-11561810131



#10 dTraderB

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Posted 30 June 2019 - 09:08 AM

Example: I have to see to believe this great rally everyone is expecting after the "tremendous" trade talks with China because it seems too easy, too sure, too obvious, and too crowded. But, it can still happen...

 

Another lesson: keep political affiliation/ideology totally separate from TRADING.

 

Tom McClellan @McClellanOsc
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One of the best (and hardest) lessons to learn about the financial markets: don't confuse a belief/hypothesis with a fact. Shorter version: Doubt everything until proven, and doubt it some even then.

10:39 AM - 27 Jun 2019