- 12th October 2019
- Posted by: Muff lbr
- Category: Economics, Finance & accounting
- Investors cheer a partial trade deal with China but soon realize there is no clear timeline for removing existing tariffs.
- Chinese companies do not meet U.S. accounting standards, and there’s been no clear progress with its regulators.
- Nevertheless, delisting Chinese companies from U.S. indexes is not an attractive option.
After a partial trade deal, what’s next?
The next move could be a ratcheting up of the attacks on Chinese listed companies in the United States.
Friday’s rally clearly indicates that the market is happy for the moment with just a partial deal, though the Dow gave up 200 of its 500-point gain in the final half hour as markets realized there was a cessation of tariff hikes but no clear timeline for removal of the existing tariffs.
UBS’ Art Cashin is doubtful that the good feelings will last. “I don’t think this gets us to Christmas,” Cashin said. “I think it could be a temporary truce that wouldn’t last very long.”