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.
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