China Deal is Close; More Important to Markets than Trump Probes
Author: Greg Valliere
March 4, 2019
DONALD TRUMP’S HARD-LINE TRADE HAWKS reportedly are grumbling about a modest China deal that needs sharper teeth, but the president wants a victory — soon. We had expected an agreement with Beijing later in the spring, but this one apparently can’t wait; even if there’s simply an agreement in principle later this month, a signing ceremony would be very good optics for Trump.
MEANWHILE, THE EXTENT OF INVESTIGATIONS targeting Trump and his family came into focus this past weekend. The Chairman of the House Judiciary Committee, Jerrold Nadler, said yesterday that he will subpoena dozens of witnesses and will investigate obstruction of justice; the next bombshell witness will be Allen Weisselberg, the CEO of the Trump Organization, who knows far more than Michael Cohen.
WASHINGTON IS BUZZING ABOUT THE “I” WORD, but impeachment strikes us as premature. First, the long-delayed Mueller report still hasn’t been released, and many analysts expect it to be simply a road map for other investigations; an indictment of Trump is unlikely. And we suspect that hearing after hearing this spring could begin to bore — or annoy — the public if the Democrats overplay their hand.
THIS RAISES THE ISSUE OF A DEEP SPLIT among Democrats, with socialist firebrand Alexandria Ocasio-Cortez compiling a “list” of apostate House Democrats who don’t consistently vote with the party. This has outraged moderates who believe the 29-year-old Ocasio-Cortez could become an albatross, actually benefiting Trump in 2020. They’re cautious on impeachment; she is not.
FIRST TRUMP VETO: The president’s declaration of a national emergency at the Mexican border already has been rejected by the House, with the Senate now likely to follow. But there aren’t enough votes to over-ride his nearly certain veto. The press is making much over a veto fight, but Bill Clinton issued 36 vetoes (two over-ridden), George W. Bush had 12, with four over-ridden, and Barack Obama had 12, with one over-ridden. The surprise with Trump is what took so long?
BOTTOM LINE: Trump is itching for a fight, and he has the one polling number that Republicans have to respect — a stunning 88% of GOP voters support him, according to a new NBC-Wall St. Journal survey. That should keep Senate Republicans in line if these sprawling investigations ever lead to a trial.
IN THE MEANTIME, INVESTORS can expect a modest China deal that effectively will end the trade war. And a spring bounce-back is coming after a soggy first quarter GDP performance; by May the economy will be looking better, thanks largely to the amazing jobs market, which shows no signs of slowing — as we’ll probably see when a solid unemployment report is released on Friday morning.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), Highstreet Asset Management Inc. (Highstreet), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI and Highstreet are registered as portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2019 AGF Management Limited. All rights reserved.