Update (11 am ET): In a sign of just how eager the market is to hear anything remotely indicative that a trade deal will be reached in Washington this week, stocks rocketed higher after Sarah Sanders said that White House had reliable intel that China want to make a deal.
She basically just reiterated what Trump said in a tweet earlier today, but the market reacted like it was hearing the news for the first time and Dow futures briefly tagged overnight highs
The Dow climbed more than 100 points before the gains started to fade.
The comments were made shortly before the start of a scheduled 11:30 am ET cabinet meeting.
While it's unclear where Sanders got her information, Global Times editor Hu Xijin send a starkly different message when he one again communicated that China is "fully prepared" for escalation.
China has fully prepared for an escalated trade war. It is a new strategy of China to engage in trade talks while fighting a trade war. I think China bets on the fact its politics is more powerful than US politics. Trade war will be decided by domestic politics eventually.— Hu Xijin 胡锡进 (@HuXijin_GT) May 8, 2019
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Update (8:53 am ET): Almost immediately after Trump sent futures higher with a series of tweets touting the possibility of a deal with Beijing, the US Trade Rep's office appeared to pour cold water on Trump's claims by publishing a notice suggesting that Washington is sticking to its guns and raise tariffs on Friday.
- U.S. ISSUES NOTE ON INCREASING TARIFFS ON $200B OF CHINA GOOD
- U.S. NOTICE SAYS TARIFFS ON $200B OF CHINA GOODS GO UP FRIDAY
The notice confirmed that new tariffs would take effect on the tenth of May, and caused futures to pare some gains.
Though futures are still well above their lows of the session.
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Futures are spiking after President Trump tweeted Wednesday morning that Vice Premier Liu He would be coming to Washington to make a deal.
The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to “negotiate” with Joe Biden or one of the very weak Democrats, and thereby continue to ripoff the United States (($500 Billion a year)) for years to come....— Donald J. Trump (@realDonaldTrump) May 8, 2019
....Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers...great for U.S., not good for China!— Donald J. Trump (@realDonaldTrump) May 8, 2019
Trump also accused Beijing of trying to stall negotiations in the hopes that they might be able to negotiate a more favorable deal with Joe Biden or another "weak" Democrat. Futures and the dollar jerked higher after trending lower for most of the morning.