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Trade War relief and the Stock Market goes higher - feels like Groundhog’s Day

Another jump this week in the market, driven by recent expectations that the trade war between the US and China might be easing. President Trump stated that he would be willing to delay the March 1st deadline for new tariffs on $200 Billion of Chinese goods, if progress is made in trade talks this week. However, it is also known that there are no planned meetings between President Trump and China’s President Jinping before the March deadline.

In addition, the Commerce Department is scheduled to release a report on February 17th, that is expected to recommend tariffs on European autos. This could create additional uncertainty in the markets, as it will drive trade negotiations out in the future. It is reasonable to assume that those negotiations would not occur until after a trade deal with China is reached.

The stock market doesn’t like uncertainty, and it certainly is tired of the constant churn in rumors and speculation regarding the state of these negotiations. The market responds well and hits new highs when there seems to be a resolution, and reacts poorly to news that the two sides are far apart. It’s not unlike the movie Groundhog’s Day, where Bill Murray’s character gets to relive the same day, over and over, repeating the same steps and reliving the same outcome again and again.

groundhog, groundhog day, stock market

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