Global economic conditions did not suffer 'event risk' but conversely had a down-and-up day for most markets (including Asia's), as we meandered to a tense time of a high-level trade dinner Thursday night and of course the trade negotiations with China Friday; although they were cut short after 2 hours. 

The view that a resolution takes 'time' relates to both sides believing it's sort of a defining time, perhaps for a generation; besides it's risky; but perhaps a failure to 'deal' is even riskier. Already, China does provide existential risks obvious to the United States; so that's part of the need to stick fairly tough with our position. And we commend this Administration for doing just that.  

In China they have their own politics; so if most of their '7 top party leaders' disapprove of their negotiators' deal; they might have trumped Xi's optimism about the preliminary terms and compelling the retrenching of last week that of course triggered Trump's heavier and more-immediate tariff moves. 

It should be noted that China could rattle sabers a bit by selling Treasuries, as they are one of the largest holders. Or they could formally devalue their currency; though President Xi has promised not to (and it would soften the blow of tariffs and actually defeat the goal of higher tariff-added U.S. pricing; while collecting more money from tariffs... be careful that's not exactly the President's thinking). Or Xi might take a 'higher road' with modest moves. He is mostly focused on China 2025; Belt & Road Initiative, and so on. Lots might just depend on 'what Xi & Trump' discuss; possibly this weekend.  

After very lengthy texts this week (trying to outline many issues and stocks; some big ones rebounding and smaller ones struggling to find any support); let me highlight a few points over this weekend; ahead of a trading week for sure dominated by speculation about the ongoing trade talks:

• President Trump's not trying to single-handily wreck the global economy and I don't believe there is that kind of train-wreck forthcoming; Friday's outcome was much as outlined as the most-likely market behavior;

• President Xi is unlikely to disrupt currency markets (more than ongoing upward drifts of the Dollar vs their Yuan), and will look at other types of what he calls 'retaliation' (hopefully not involving military threats against Taiwan or more occupations of shoals or islands in the S. China Sea);

• Oil remains firm as tensions with Iran persist; featuring a threat against our USS Lincoln Carrier by a Tehran naval officer today; while a Naval commander said he'd order the Carrier into the Persian Gulf 'if needed';

• That suggests (as I suspected for maneuvering room) that USS Lincoln would cruise around the Indian Ocean outside of the Straits of Hormuz, unless action requires the Task Force physically entering the Gulf;

• Friday was far too preoccupied with the UBER IPO; which was poorly received as suspected; and reflects growing concerns about the ride sharing industry's 'time to profitability' and awareness of Lyft's IPO;

• Uber's underwriters couldn't even keep it above the 'official' offering of 45; and like Lyft; we'll look at both after their Lockup Expirations later;
• Several bigger stocks, particularly with greater involvement with China, did rebound with the market from intraday lows, but not with any gusto; like Apple (despite realization of increased revenue from 'services');
• Oil and Oil stocks are firmer; and there is no new developments from Venezuela; aside rumors that Trump is upset with Bolton's for pushing the idea of an easy overthrow of Maduro (not with 20,000 Cubans there to support the dictator; so you generally do have 'military vs. people');
• This coming week an interesting meeting between Sec'y. Pompeo and Russia's Putin, takes place in Sochi Russia; discussing everything; as I ponder whether it's groundwork for a reconciliation effort later this year;
• Where the U.S. (or even China) stand is 'not' so devastating (tariffs or not) as portrayed; so long as China doesn't miscalculate and provoke a different conflict; the idea of 'no instant deal', but continuation of talks, is the reason why I minimized 'event risk' in last night's remarks.  

In sum: Even retailers won't see immediate impacts from tariff moves afoot; and few are noticing currency moves that gradually take the edge off of this. The real risk to the global economy is if we won't address this situation.

Relegating trade negotiations to the back-burners too long, by Government and business (especially the big multinationals), was our 40 year warning. I think everyone realizes this; some believe it's too late to achieve much, but that we must try to. Hence there's some bipartisan support for this President taking-on China now; especially as both sides seem to want a deal.  

As for the S&P, this is not the end of the world; it's evolving ongoing outlined correction for April / May; with rebounds along the way. Aside news-related 'pops or flops'; the market pattern next week might try to be fairly neutral.