18 February 2019
Bassanese Bites: Buy the rumour – Week beginning: 18 February 2019
It was another positive week for global stocks, as ongoing encouraging talk about progress in US-China trade talks remained the gift that keeps on giving. Last week it was Trump’s announced willingness to extend the March 1 deadline that boosted sentiment. It’s fair to say a positive trade deal now seems increasingly “priced” into the market, and once it’s settled it may well become a classic case of “buy the rumour, sell the fact”.
Washington’s deal to avoid another Government shutdown was also a relief, with Trump finally resorting to the national emergency route – and inevitable court wrangling – to get his Mexican Wall built. Whether or not The Wall is built is of secondary importance for markets, the big relief is that shutdown threats – and potential associated risks to economic growth – no longer seem part of Trump’s bargaining tactics.
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