Trading Blow for Blow
The US and China are back at each other’s throats, leaving some investors worried about their prized holiday season paydays. Hey Trump, keep the trade war down! Some of us are trying to invest here!
Easily explaining all-time stock market highs, the trade war has been on course for a fairly quiet week this week. It didn’t last, however. Yesterday, President Trump gave Hongkongers the Thanksgiving gift of human rights, and that really ticked off Beijing! Having been tear-gassed and shot at by mainland Chinese police, locals saw two US bills get signed that put Hong Kong’s special trading relationship with the States at risk if those human rights abuses continue. That’s really thrown a spanner in the Chinese works!
President Xi has promised to retaliate, and that probably means waging more tariffs and inviting an equal reaction from the White House. “If we get a Chinese military-handed intervention, then it would be nearly impossible to reach a trade deal,” said Holger Schmieding, chief economist at Berenberg.
With import taxes steepening on everything from children’s toys to clothing, American retailers are attracting bearish sentiment from some corners of the market ahead of a clutch December. Luckily, most retailers have planned ahead. Inventory for this holiday season was pre-bought last year, so the real threat comes the way of fewer days than usual before Christmas, and consumer confidence. Keep an eye on Black Friday and Cyber Monday data to see how well retailers are riding these bumps in the road!