As noted moments ago, futures ramped to new record highs rising above 3,100 following a quote from top Trump advisor Larry Kudlow, who has figured out that he gets most bang for the buck in juicing futures when liquidity is virtually nil, around 8pm or so, when he told reporters that Phase One of the China deal is "down to the short strokes", adding that "we are in communication with them every single day right now", and repeating that "a deal is close", even if "it’s not done yet."
And yet, while such Deal On/Deal Off market manipulation is nothing new and has been going on for over a year and a half, there is the possibility that China is about to be royally pissed off, if not by Trump for whom a China (non) "deal" is critical to pushing the market to all time highs just before the 2020 presidential election and thus will not dare to anger Xi Jinping over the ongoing fiasco that is Hong Kong, then by the Senate, which is preparing for quick passage of legislation to show support for pro-democracy protesters in Hong Kong by placing the city’s special trading status with the U.S. under annual review.
According to Bloomberg, the Senate is set to bring the bill to the floor under an expedited process that would allow for quick passage unless there is an objection, according to the lead sponsor, Republican Senator Marco Rubio. And since it is unlikely anyone will object, the bill is expected to pass as early as next week.
"The world witnesses the people of Hong Kong standing up every day to defend their long-cherished freedoms against an increasingly aggressive Beijing and Hong Kong government,” Rubio said. “Now more than ever, the United States must send a clear message to Beijing that the free world stands with Hong Kongers in their struggle."
Rubio and Democratic co-sponsor, Senator Ben Cardin, have garnered broad bipartisan support for their bill, including from Senate Foreign Relations Committee Chairman Jim Risch, who has pressed Senate Majority Leader Mitch McConnell for a swift vote. Rubio and McConnell met late Wednesday to hash out a way forward for the legislation, which would also levy sanctions on people the president finds responsible for human rights violations.
“The world needs to see that the United States will stand up and tell the Chinese Communist Party that what they are doing to the people of Hong Kong is wrong,” Risch said in a statement. “The U.S. stands with the people of Hong Kong, and I look forward to continuing to work with Senate leadership and my colleagues across the aisle to move this bill swiftly.”
While it is unclear what the Senate's vote will achieve, besides potentially removing any hope for even a "phase one" deal, Hong Kong has been paralyzed since Monday morning, when a demonstrator was shot during protests.
Meanwhile, Bloomberg notes that the White House declined to comment Thursday when asked whether Trump would sign it into law; a veto by Trump would indicate that for all the belligerent posturing, Trump and Xi have long since reached an agreement behind the scenes, whereby China "folds" to Trump's demands, while Trump refuses to intervene in Hong Kong.
The Hong Kong Human Rights and Democracy Act would require the State Department to certify at least once a year whether Hong Kong should keep its special status under U.S. law. This legislation is slightly different from the version passed by the House of Representatives, which means the two bills would have to be reconciled and passed by both chambers before going to President Donald Trump.
Predictably, on a day when China's president Xi said that "stopping the storm and restoring order" in Hong Kong is the most urgent task for Hong Kong, once again raising the possibility of military intervention by the PLA, the Chinese Foreign Ministry on Thursday warned of retaliation if the measure passes Congress, adding that China will take resolute measures to safeguard its interests, and repeating that the US should immediately stop interference in Hong Kong issues.