Then a key China manufacturing survey was released, with a score that missed economists' expectations, dipping slightly into contraction territory. Asian markets sold off instantly, then, a bit later, U.S. futures followed suit.
My thought on the data release was constructive; as it obviously drives home the need for China to make a legitimate deal with the U.S., and soon! As for the U.S., the then 200-point dip in the Dow (on top of the worst December in nearly 90 years) speaks to the undeniable fact that there'll be no winner in a protracted trade war between the world's two largest economies.
Therefore, I saw the selloff on the China data as a very buyable dip.
But then, alas, the following headline hit:
US Trade Rep. Lighthizer thinks more tariffs could be needed to get meaningful China concessionsAnd, of course, the Dow future contract immediately plunged to a -400+ depth.
Still could be a buyable dip, as we might (should) see the White House, or Lighthizer himself, attempt to defuse this one quickly. And, again, last week's action (on albeit light volume) did strongly hint of a change in trader sentiment. Although that sentiment was no doubt influenced by recent positive commentary from both sides; if the White House's trade rep gets his way you can absolutely forget about it!
As for that trade rep, Mr. Lighthizer, while I've not been kind to him herein (and I'm not changing tunes this morning), I will say that on one occasion earlier this year I found him to be right on the money:
In a hearing on Capitol Hill where he was asked to articulate the White House's intentions on trade, he found himself needing to confess the following:
"I'm not an economist, I'm an attorney."Need I say more?