Follow-Through Thursday – 5% Correction or Just the First Step?

Related imageDOOM!!!

That's what I said would happen on Tuesday morning so this is certainly not surprising.  Even from my vacation on Monday I could smell the BS of the move up, as Team Trump's Trade Triumph was not at all confimed by their Chinese trading partners and, as I said in the Morning Report:

When you think about it, of course, not only has NOTHING changed since last week but now we know for sure there will be no trade deal until March at best.  Trump showed real weakness backing down on more tariffs since that was the only leverage he had in this negotiations and China's tariffs have always been retaliatory – so Xi has given up nothing at all and Trump has stopped fighting – how is that worth $500Bn of stock advances?

All pretenses of improving US-China relations were dashed yesterday evening as news spread that the CFO of Huawei was arrested in Canada on Dec 1st, at the behest of US Authorities over "Iran Sanction Violations" – something the company claims to have had no notice of and no one was more shocked (or insulted) than China's President Xi, who was pretty much sitting down to dinner with Donald Trump at the time and was embarassingly clueless that this was happening.  Making a Chinese leader look clueless has historically been a big mistake….

The United States is “resorting to despicable hooliganism,” China's Global Times wrote in an editorial published Thursday. “Anybody can see that the United States is maliciously picking holes in Huawei, trying to give it a hard time using the American legal system,” said the paper, which often reflects the foreign policy views of the ruling Communist Party.

The “persecution” of Huawei is “clearly contrary to the spirit of the consensus” forged between Trump and Xi, it said.


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