So, I did say my “worst-case scenario” did not seem like the most likely scenario to play out from the G-20 summit. Now we know my “best-case scenario” and most likely scenario is the one Trump and Xi have chosen, but what does that mean for the month of July?
Here was the best-case scenario
Xi and Trump agree to come out of their meeting sounding like there is hope for a future agreement soon (albeit with nothing specific that has been agreed upon). We all know there is no chance they come out with a deal. So, the best hope is they come out with Trump talking (again) like a deal is imminent and, therefore, he’ll hold off on his tariff increases a little longer. The market feels relief and breaks resoundingly through its eighteen-month ceiling. The remaining indices that have not cleared through their upper barrier manage also to poke through to a new high and manage to hold … for a little while.