- Any significant trade resolution between China and the U.S. appears unlikely.
- The impeachment proceedings will give Trump powerful leverage that can get him re-elected in 2020.
- The stock market is very likely to go through a massive selloff but Trump may come out victorious.
There are two catastrophes coming for the stock market and the economy. The first one will dissipate all bullish momentum that drove the S&P 500 to fresh highs of 3,050. The second one will likely force President Donald Trump to ignite a massive selloff.
We’re talking about the caving in of the trade talks between China and the United States. In addition, the House decided to approve impeachment proceedings. While it may seem that Trump is losing ground, the POTUS unleashed one of the most powerful weapons in his arsenal: misdirection.
Donald Trump is not happy with the Fed. | Source: Twitter
The U.S. president is trying to steer the attention of the public away from his recent misfortunes by blaming Federal Reserve Chairman Jerome Powell. This comes after the Fed cut rates for the third time this year.
Trump can pin it on Powell as much as he wants but the fact remains that his re-election is at stake. With China’s non-commitment on trade and the House passing the impeachment procedure, a perfect storm is brewing for the S&P 500.
There Is No ‘Phase One’ Deal – Bad News for the S&P 500
On Oct. 12, Trump took to Twitter to brag about the “greatest and biggest deal ever made.” However, China countered with an announcement that they wanted to extend talks to the end of October. At the end of October,