• President Trump’s tweet on Thursday that he had a “long and very good conversation with President Jinping of China”
  • Strong economic data from the U.S. is not helping either.
  • The Fed will be meeting on Wednesday


President Trump’s tweet on Thursday that he had a “long and very good conversation with President Jinping of China” didn’t serve the markets for long. Stocks in Hong Kong, Shanghai, Tokyo, SouthKorea,and Australia were all in red today including U.S. futures after White House economic advisor Larry Kudlow said on Friday that President Trump had not asked his Cabinet to draw up a trade deal with China. Such conflicting reports make investors more nervous, especially seeing that bears seem to have taken control over the past several weeks.
Strong economic data from the U.S. is not helping either. Non-farm payrolls grew by 250,000 in October, much better than the anticipated 190,000. More importantly, wages advanced 3.1% year-on-year, the highest in almost a decade. For those investors hoping that the Federal Reserve may slow down the tightening of monetary policy, the non-farm payrolls report just doesn’t help.
The Fed will be meeting on Wednesday and will likely confirm that a December rate hike is a done deal, ignoring October’s steep selloff in the financial markets. So, if rising interest rates were the primary concern of investors, nothing willchange this week.