Apparently, Larry Kudlow wasn’t available to don one of his famous Gordon Gekko costumes and make the TV rounds on Tuesday, so instead, Kellyanne Conway showed up on Fox & Friends to talk shop.
Conway’s ghostly visage materialized before the opening bell on Wall Street and her comments on the China trade deal left something to be desired, especially on the heels of what the market interpreted as marginally positive remarks out of the Chinese Commerce ministry overnight.
“We continue to negotiate, but there’s forced technology transfer, the theft of intellectual property, the trade imbalance”, Conway said, adding that although “the president wants a deal, he always waits on the best deal”.
She was quick to emphasize that the two sides are getting “very close”, but her remarks about “sticking points” aren’t welcome at a time when everyone is concerned that Trump will back out at the last minute like he did in May.
It didn’t help that Conway referenced that episode as though it were a point of pride for the White House. “He could have had a deal last May”, she reminded everyone.
Correct. He could have. And nobody was amused when, on the evening of Sunday, May 5, Trump broke the Buenos Aires truce that had held since December. Stocks subsequently fell for four consecutive weeks on the way to the worst month of 2019.
Also unnerving were Conway’s lengthy remarks about the USMCA and other “deals” the administration has made or is in the process of making.
It’s not that markets aren’t looking forward to the passage of “new NAFTA” or that anyone is necessarily displeased with the other agreements Trump has struck. It’s just that there are lingering questions as to whether those bilateral (and trilateral) arrangements actually represent material improvements from the the way things were before.
If they don’t, one is left with little choice but to say that the multi-front trade war has been a net negative for the economy.
That leaves a Sino-US pact as the only thing that actually “matters” when it comes to putting the brakes on, for example, plunging CEO confidence, and the manufacturing malaise, which, a good print on Markit’s gauge notwithstanding, is still weighing on the US factory sector until ISM indicates otherwise.