With the U.S.-China trade truce nearing its 90-day deadline, a meeting between U.S. President Donald Trump and Chinese President Xi Jinping appears “highly unlikely,” but President Trump is showing more signs of flexibility with the deadline looming in the beginning of March.
The softened stance by President Trump didn’t necessarily surprise investors, but rather confirmed their notions.
“Markets always assumed the March 1 trade deadline was flexible, but this just confirmed it,” Tom Essaye, founder of The Sevens Report, wrote in a note. “Bottom line, the fundamentals are roughly balanced right now as there is optimism that a trade deal will get done.”
“Looking ahead, a trade deal could reduce concerns about growth and allow the 2019 rally to continue,” Essaye added.
Leveraged ETF traders can take advantage of the Direxion Daily FTSE China Bull 3X ETF (NYSEArca: YINN) to go long or the Direxion Daily FTSE China Bear 3X ETF (NYSEArca: YANG) for inverse plays.
In the video below, Charlie Bobrinskoy, vice chairman of Ariel Investments, discusses the market day and the effect a trade deal with China will have on the market.
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