Dow Falls Over 300, US-China Trade Talks in "Final Stages"

CNBC reported that the U.S. and China could be in the final stages of negotiations after the trade truce between the two economic superpowers expired on March 1. Despite this, the Dow Jones Industrial Average fell over 300 points, while the S&P 500 dropped 1.18 percent and the Nasdaq Composite lost 1.07 percent.

Per CNBC, “Negotiations are in the “final stages” as the two sides plan a summit for the end of March at Mar-a-Lago, President Donald Trump’s Florida resort, sources told CNBC. If a deal is reached, the U.S. could roll back tariffs on at least $200 billion in Chinese goods while China could remove or cut industry-specific levies like those on autos.”

Prior to any deal being official, Chinese President Xi Jingping and China’s policymaking committee Politiburo would have to sign off on the particulars. U.S. President Donald Trump is said to be pushing to finalize a deal despite U.S. Trade Representative Robert Lighthizer lobbying for more concessions.

“Markets expect a deal by the end of March, but the key here will be whether the deal results in the removal of all tariffs,” said Tom Essaye, founder of The Sevens Report. “The reports this morning imply that might happen, but it will have to become reality for US-China trade to provide a sustainable positive catalyst for stocks.”

 Related: Political Controversy Isn’t The Only Concern With Buyback ETFs

U.S.-International ETF Plays

Last week, National Economic Council Director Larry Kudlow said that ongoing negotiations with China are making “fantastic” progress. During the interview, Kudlow said China was willing to make key changes regarding the theft of intellectual property, which has been a major point of contention during the trade talks.

“Last week was fantastic,” Kudlow told CNBC. ” “We’re making great headway on nontariff barriers and tariffs regarding various commodities such as soybeans and energy and beef. We have mechanisms with regard to enforcement, which is — I think — unparalleled.”

“The progress has been terrific,” Kudlow added. But “we have to hear from the Chinese side. We have to hear from President Xi Jinping, of course. I think we’re headed for a remarkable, historic deal.”

Markets for much of 2018 have been sensitive to the ongoing trade wars between the U.S. and China. International and emerging markets, in particular, have also been hit by trade war news.

For investors looking for continued upside in U.S. equities over international equities, the Direxion FTSE Russell US Over International ETF (NYSEArca: RWUI) offers them the ability to benefit not only from domestic U.S. markets potentially performing well, but from their outperformance compared to international markets.

Conversely, if investors believe that international markets will outperform U.S. domestic markets, the Direxion FTSE International Over US ETF (NYSEArca: RWIU) provides a means to not only see international markets perform well, but a way to capitalize on their outperformance compared to the U.S. markets.

For more market trends, visit ETF Trends.