U.S. President Donald Trump reacts with supporters during a campaign rally in Panama City, Florida, U.S., May 8, 2019. REUTERS
NEW YORK: Equity markets will need to drop at least 10% for President Trump to talk up the prospects of a G-20-timed deal with China, according to a Raymond James policy analyst.
Attention has turned to the June 28-29 summit as “the next pivotal moment for talks,” Ed Mills wrote in a note. On Monday, Trump confirmed he’ll meet with China’s President Xi Jinping during the event in Osaka, Japan. “In the meantime, we expect threats of escalation by both sides in an effort to build negotiating leverage,” Mills said.
Trump’s remarks indicating he hasn’t made a decision yet about whether to proceed with added tariffs on $300 billion worth of goods were “standard at this point in the process,” Mills added.
He sees the legal process for those tariffs taking at least six weeks. Markets are in for more “messaging” by both sides aiming at domestic audiences -- like Trump’s suggestions to help U.S. farmers -- he said.
U.S. equity futures rose alongside European stocks early on Tuesday morning, after the S&P 500 shed 4.6% since peaking on April 30.
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