Market is entering into a period of unstable 4-week, why the number is 4 and not 5 or 3 or other numbers? From the attached charts we can see that US dollar has been weakening because of policies of Trump, first on immigrants and later on tariff. Both S&P and US Dollar fell simultaneously. However, stock market recovered first on April 7, shortly after the Liberation Day; USD recovered later after the 90-day tariff talk started.
Now there are 150 countries on the queue to have tariff talk with US and the first batch also have 25 countries. Regretfully, only the UK came to compromise with US, and China only agreed to have ceasefire for 90 days and no agreement at all. What will happen after that 90 days? It’s too early to say now even some people said should be cautiously optimistic. According to such a progress, it’s impossible to finish all tariff talk within 90 days. For the first batch of countries, just carry on and see how much can be done; but for the rest of those 150, Trump will announce on his own a new tariff, if they so not agree, just have the de-coupling, and if they agree of course there will not be any problem.
However, the most important and hardest to talk is tariff with China. In Feb, China announced that Trump would visit Beijing in April and US announced Xi will visit US in June. The former announcement had not come true, but there is still a birthday party to be held in Mar-A-Lago. The birthday of President Xi is on Jun 15th and Trump on Jun 14th. So there will be a cross day celebration, but no further news for the time being. Only announced there will be a grand military parade on Jun 14th to commemorate the establishment of US Army for 250 years. That day is the 79th birthday of Trump and US Army was established in 1775, the independence of US was declared on 1776.
Last week Trump said that he would visit China, but how about the birthday party in Mar-A-Lago? Still have 4 weeks to go, but no one else talk again. When will the two leaders meet? The 90-day period would not pass silently and smoothly, should be quite a number of ups and downs. Donald Trump has filed for bankruptcy for 6 times but still rise again, which means even if he could reach all his targets, his policies will have a lot of setbacks and unpredictable adversities ahead.
During the transition period, the United States will step up the import of daily necessities to prevent empty shelves, and Chinese workers can also resume work to improve unemployment. However, the actual impact will not emerge until several months later, and further negotiations are needed to determine the situation. The weakening of the US dollar is inevitable.