For our Weekly Wrap-Up this weekend, I wrote a section titled “What Will It Take?”
The question was essentially: “What do the markets need to see to firmly commit to a new direction?”
What big piece of news or external factor could convince investors either that it was fully time to get back in, or 100% time to get out?
Well, we might have gotten the news this morning. Or, more accurately, yesterday afternoon.
The United States announced over the weekend that they had struck a trade deal with China, agreeing to immediately slash tariffs, in a move that will rescue many small businesses already on the brink and completely reshape the short-term (and, possibly, long-term) future of the economy.
(As an aside: I will never sleep on Cabinet nominations again. Scott Bessent might be the single most consequential Cabinet Secretary I can remember, and he’s only been in office 115 days or so).
As I write this, the markets have screamed higher shortly after the open and look prepared to continue strong all day.
Of course that could still change.
But China was really the deal to end all deals as far as tariffs go. While we might hear about smaller agreements over the coming weeks, a de-escalation with China was the #1 concern for most investors and businesses out there.
Over the coming weeks, I’m sure we’ll hear stories about “who blinked first” coming from both sides of the negotiation.
But the truth is, both sides realized they couldn’t continue at a 100+% tariff rate, so they mutually agreed to slash it down.
Of course, there’s a lot left to be decided. As with anything in this White House, there will be unexpected changes and surprise left turns.
But it feels like a morning to celebrate nonetheless.
The markets are looking very positive. Hopefully the wave lasts all week and we have a great time!
Also: make sure you pay attention to what Nate and Jamie have to share today at 1:00 PM ET — it couldn’t be better timed with this China deal. Check it out here
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