it’s not quite here yet, but it’s quite clear that we have a US-China deal that is about to be announced and signed. The terms of that deal of course have yet to be announced, but it would appear that Mr Trump is having big input into it, and the vibe suggests he has given orders to his negotiators to just do a deal. Those in Command will say that it is a tough deal and Trump will declare a victory. To the extent that it goes beyond promises of more purchases of US goods, it will be useful. To the extent that it does not, the announcement will be a prelude for round two. It would appear that other parts of the US world, including Congress, big business and the intelligence community, have taken a pretty consistent view, and the most significant result of the past months of standoff may end up not being the deal itself but the highlighting of the fundamental issues that exist.
As we suggested they would, China stocks have been on a bull run this last week, and MSCI’s decision to include even more China listed equities into its global indices will definitely provide a boost, both to the markets themselves and to the levels of China risk that investors around the world are exposed to.
Huawei developments this week included a new folding smart phone, an exclusive report from Reuters on the role HSBC played in providing information on the case, and a full-page Huawei advertisement in major US media explaining how the company is misunderstood. “”Our doors are always open. We would like the US public to get to know us better,” the advertisement said. Doors??!! Did nobody read this copy carefully?
Have a pleasant weekend.