There’s been no shortage of news recently regarding the trade war. As the markets flip-flop while politicians deliberate and negotiations eventuate, audacious investors try and time the ups and downs of the market to line their pockets.
The latest example of this vacillation occurred this week, when stocks rallied on Thursday after President Donald Trump said he will meet with Chinese Vice Premier Liu He on Friday, raising hope the two countries could make progress on the trade front, after tanking overnight when the South China Morning Post reported Wednesday night the U.S. and China made no progress in deputy-level trade talks this week.
“They’re going to announce something. We just don’t know what that something is,” said Larry Benedict, CEO of The Opportunistic Trader. “We can probably break the upside of this range on this move, but I just don’t know if we’re going to get enough for an all-time high.”
In a tweet, Trump said: “Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House.”
Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House.
— Donald J. Trump (@realDonaldTrump) October 10, 2019
Opportunity Abounds
For investors looking for some stability, the contrasting headlines and subsequent market moves can be nauseating. But for those willing to take some risk, opportunity abounds.
“The ongoing back-and-forth continues to offer opportunities to fade over-reactions in the market,” said Ian Lyngen, head of U.S. rates at BMO Capital Markets. “At some point, however, there will be some semblance of outcomes across these dimensions, though we fear the finales may underwhelm as they are wont to do.”
Despite the chaos, many experts seem sanguine that negotiations will resolve fruitfully.
“This is the emotional roller coaster that we have to strap in for while these negotiations get hashed out,” Jeff Kilburg, CEO at KKM Financial, said in an email. “The transparency of these negotiations are overwhelming for markets but, I remain optimistic about the outcome.”