US Equities Plunge After Retail Sales Slump, Trade-Talks "Deadlocked"

Just when you thought it was safe to get back in the water - reality takes two big bites out of your paddleboard.

Retail sales collapsed in December...

...enough said about that - sparking an initial leg lower in stocks.

But then, The Wall Street Journal struck with a headline warning that US-China trade talks are deadlocked:

Trade talks remain deadlocked as Beijing refuses to eliminate coerced technology transfers or government subsidies to Chinese companies.

During the negotiations this week that were in their fourth day Thursday, U.S. and Chinese officials have remained deadlocked on a number of issues underlying the current trade dispute, according to people with knowledge of the matter. These include Washington’s complaints that China pressures American firms to share technology and uses industrial policies to favor domestic companies at the expense of U.S. competitors.

Having denied those allegations, Chinese officials instead are focusing on ways to boost U.S. exports to China. For instance, China’s top economic-planning agency is proposing to increase U.S. semiconductor sales to China to $200 billion over six years, said U.S. companies briefed on the plan. The sum is about a fivefold increase over current exports.

 

...and that accelerated the decline in stocks...

Sending all the majors into the red ahead of the cash open...

Interestingly, yuan has not reacted (yet)...

Exactly as we warned overnight, the headlines hinting at a 60-day delay for the tariff increase were not a bullish sign, they signal that neither side is any nearer a deal than they were 60 days ago.

But don't worry...