Dow Jones Sell-Off Timed Perfectly For Trump-Xi China Trade Deal


Stock market bulls have a reason to smile as they watch the Dow Jones industrial average, S&P 500 and Nasdaq composite sink toward their lowest levels of the year. Each Dow Jones sell-off likely gives a slight boost to the chances that President Donald Trump will strike a China trade deal with Chinese President Xi Jinping to avert an escalation of Trump tariffs.

“We’re betting on a (China trade) thaw, for the following reason: Trump knows he needs a happy stock market ahead of his re-election campaign,” Greg Valliere, strategist at Horizon Investments, wrote Tuesday. “Besides, he can spin even a mediocre deal as a great triumph. We think there will be more than just good atmospherics in Buenos Aires.”

Trump is set to meet with Chinese President Xi in two weeks at the G-20 conference in Argentina. Trump and Xi are scheduled for an extended meeting on Dec. 1. Barring a China trade deal, Trump has previously warned that he’ll order tariffs on the roughly $250 billion in Chinese imports he hasn’t yet targeted. On top of that, Trump tariffs on $200 billion in imports are set to jump from 10% to 25% on Jan. 1.

Rest assured that Trump is closely watching the Dow Jones, which he has regularly touted as evidence of his success as president. He boasted to the UN General Assembly in September that America had added $10 trillion in wealth under his presidency amid a booming stock market.

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