Stocks may be bouncing but Trump's tweet wasn't really signaling all-clear on trade

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President Donald Trump says China wants a deal, but Wall Street is not totally convinced there will be one, even though stocks rose on the president's remarks Wednesday.

div > div.group > p:first-child"> Before the market open, Trump tweeted that Chinese Vice Premier Liu He is coming to the U.S. to make a deal. Several hours later, White House spokeswoman Sarah Sanders said there were"indications" the Chinese delegation wants to reach an agreement. Both comments gave a boost to the stock market, which was higher in afternoon trading after starting the day lower.

Keon said the market believed a deal was coming this week, based on comments from U.S. officials, so when Trump first tweeted on the weekend that he could increase tariffs on Chinese goods, it was a surprise. Dan Clifton, head of policy research at Strategas Research, said he believes the main hang up in the talks has been about tariffs and whether they stay in place after a deal.

"I would still say this is very precarious. And you are still getting the U.S. spin on things," said Chandler."I think tomorrow is a wild card." "The economy can handle the escalation to 25%. What we really fear is escalation after that. The rest of the goods would be direct to consumer goods and it would start hitting consumer spending and prices in a much bigger way than the first two rounds," he said.

 

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