President Trump’s tweet about the upcoming meeting with Chinese President Xi Jinping helped boost market sentiments yesterday. Qualcomm (QCOM), Intel (INTC), and Advanced Micro Devices (AMD) rose 4.1%, 2.7%, and 4.3%, respectively. General Electric (GE) also rose 3.7%, taking its year-to-date gains to 43.4%. Meanwhile, while markets might be getting a little carried away over the meeting between President Trump and President Xi Jinping, Blackstone’s CEO Steve Schwarzman sounds circumspect.
On the possibility of a deal being signed at the meeting, Schwarzman said, “I think that’s extremely improbable because there has been almost nothing happening since May when the discussions ended.” He also added, “I think the expectation of signing something is not on the table.” Earlier this week, Commerce Secretary Wilbur Ross had also echoed similar views. Speaking with CNBC, Ross said that the G20 is not “where you’re going to negotiate a 2,500-page agreement.” He added, “there may be an agreement on the path forward, but that’s about as far as we can expect it to go.”
What to expect
To be sure, a truce like we saw after the Buenos Aires summit looks like the best possible outcome from the meeting. When US-China trade talks looked on track earlier this year, there were expectations that the two leaders could sign a trade deal at the G20 Summit. However, as things stand currently, there doesn’t seem to be a composite trade deal where Trump and Xi Jinping could sign on the dotted line.