Yesterday, it was announced that a meeting between President Trump and Chinese President Xi Jinping was not likely to occur prior to the deadline for the trade deal on March 2nd. While the market took the news badly, it is not as if they have called off a meeting of any sort. Trump is set to meet with North Korea’s Supreme Leader Kim Jong-un at the end of the month in Vietnam for the second time, and some speculated that given the proximity, Trump and Xi would find time for one another. According to Larry Kudlow, the meeting is still expected to take place. However, he cited that the two sides aren’t exactly close to any kind of a deal. While this news is not encouraging by any means, I would be surprised if there is not some kind of extension of the current status quo to avoid the increased tariff hikes. Barring that, I would expect significantly more downside as the market has seemingly discounted the possibility that an agreement of some sort will not be reached.
S&P 500 Apr ’19 Daily Chart