It is no surprise the hate-Trump 24/7 media is ignoring the president’s brilliant strategy with the Chinese over the tariff question. But the same cannot be said of the business world.
On Tuesday, Wall Street’s main indexes hit session highs, as investors’ concerns about rising U.S.-China trade tension receded after Chinese President Xi Jinping promised to cut import tariffs. In other words, he blinked and Trump’s keen business sense won the day for the US.
Ten of the 11 major S&P sectors were higher, with the energy index adding more than 3 percent as oil broke above $70 a barrel. The biggest boost came from a 2.2 percent gain in the technology sector.
The victory was so pronounced that Xi vowed to open the country’s economy, and said China would raise the foreign ownership limit in automobile, shipbuilding and aircraft sectors “as soon as possible.” The news could not have been better for America’s thriving economy.
China and the United States had previously threatened each other with billions in tariffs. Investors feared protectionist measures would hit global economic growth, but now the opposite is true with a shrewd businessman, not a politician, in the White House.
The next test of Trump’s success comes on Friday. Big banks such as JPMorgan Chase, Citigroup and Wells Fargo will kick off the earnings season with their results.
But before that, analysts already expect quarterly profits for S&P 500 companies to rise 18.5 percent from a year ago. That will be the biggest gain in seven years, according to Thomson Reuters I/B/E/S. That means the entire Obama administration’s years of loss and neglect have been wiped out in less than 20 months.
The S&P 500 index showed six new 52-week highs and one new low, while the Nasdaq recorded 36 new highs and 22 new lows. The stunning news and the rapidly growing economy are basically ignored by the Trump-hating media.
They may ignore the major success story, but millions of investors are enjoying this unprecedented ride.