E Market Briefing For Wednesday, Dec. 11

The 'core' issue - to move S&P above or below this prevailing trading 'range' - remains exactly what we've identified: progress on China trade. That's next to be sorted out, as there are conflicting perspectives that have The White House downplaying the Chinese optimistic position.  

  

Early Tuesday morning the Chinese side (not the US) said prospects at this time are good for a lifting or deferment of American tariffs slated to take effect December 15th. Clearly they want to see that happen; even if (of course) our consumers are the ones paying the tariff via the higher prices (rarely noticed because of currency fluctuations and hammering by importers on the exporters to hold basic product prices very low).  

  

In our view this market does not tank without an outright failure of China to make a deal (or obfuscation on our part; but if that happened Trump, of course, is aware of the political implications, because he views S&P as his 'poll'). Hence Beijing knows this too; and that's the nexus for both sides to come to some sort of deal, even if it's merely face-saving and, at least initially, more focused on Agriculture than anything else.  

  

  

In sum: the market is neutral; debt issues are again being discussed; a Fed meeting is expected to yield no changes, but listen to statements for any hint of the future; and the S&P just flounders near the highs. We also have the UK vote and the future of Brexit likely determined. 

It is our desire things work out well; while being alert to shakeout risks that can occur around mid-month; especially 'if' circumstances  just happen to intrude in otherwise calm anticipation of a trade deal being key (it is; but things could get derailed elsewhere if a liquidity crisis unfolds, which is only a possibility near-term).  

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