Inexplicably, the market looks like it’s predisposed to taking some measure of comfort in Donald Trump’s weekend tweet about a phone call he had with Xi that, according to Trump, was “long and very good.”
Never mind the fact that the tweet in question was entirely nebulous and, more importantly, came wedged between a series of wild rants that again suggested the crazy badgers that live in the President’s brain are up to no good in there.
However things pan out, we know one thing for sure: December ends today, and the closing bell on 2018 will be a kind of mercy killing. This is the worst month for stocks since 2009.
For reference, below is an updated version of our annotated December futures chart which shows you how things deteriorated after the initial knee-jerk higher following the G20 (again, we would remind you that this hardly captures everything – this month featured multiple flash crashes and all manner of generalized shenanigans).
It’s worth noting that markets are putting more weight on Trump’s account of a phone call than they are on China’s December PMI data which showed the manufacturing gauge dipping into contraction territory for the first time since 2016. New export orders fell further as well.
I guess it’s time for some widely-followed cynical finance Twitter accounts to say something like “even the fake data is missing!” Because that’s definitely a joke nobody has ever heard before. In case you haven’t noticed, I’ve run clean out of patience with both bullish and bearish finance Twitter – there’s just nothing fresh out there. All of these people (bullish, bearish and otherwise) are saying the same thing with no regard for creativity or individuality.
I digress. The real joke, of course, is that when you really think about it, the U.S. is borrowing money from China to pay subsidies to U.S. farmers because the trade war the U.S. started prompted China to stop buying U.S. soybeans.
Now please, tell me again: Who is “winning”?
Oh, and China is increasingly unwilling to fund those bailouts…