Q&A: Analyzing recent stock market activity amid China-US trade tensions

MILLION, WHICH INCLUDED EXPORTS TO OTHER COUNTRIES. MEANWHILE, THE WHITE HOUSE SAYS IT IS EXPECTING TO DE-ESCALATE TRADE TENSIONS WHEN IT COMES TO CHINA. AND TODAY, THE STOCK MARKET SHOWING ANOTHER DAY IN THE GREEN, REALLY, FOR ALL THREE MAJOR INDICES. AFTER WHAT HAS BEEN DAYS AND WEEKS OF UNCERTAINTY. JOINING US LIVE FROM THE ARMSTRONG ADVISORY GROUP IS PAUL LANE. SO PAUL, LOOK, WE’VE BEEN SEEING COUNTRIES TRYING TO NEGOTIATE DEALS WITH THE WHITE HOUSE DURING THIS TARIFF PAUSE. OBVIOUSLY THE TARIFFS HAVE NOT BEEN PAUSED FOR CHINA. SO WHEN WE SEE, YOU KNOW, SEVERAL DAYS OF GREEN IN A ROW, ARE WE STARTING TO SEE THE MARKETS FIND THE BOTTOM WHEN IT COMES TO TARIFF UNCERTAINTY? OR IS THIS JUST A KIND OF A TEMPORARY UPSWING UNTIL WE SEE DEALS COME INTO PLACE. AND AND WE MAY ULTIMATELY SEE SOME OF THESE TARIFFS GO INTO EFFECT. ULTIMATELY, I THINK THAT YOU DO NEED TO SEE DEALS GO INTO PLACE TO REALLY SEE THE MARKET FULLY TURN AROUND. WITH TODAY’S ACTION, THE MARKET IS DOWN ABOUT 8% YEAR TO DATE. BUT THE OPTIMISM THAT WE’VE SEEN FROM THE MARKET THE LAST COUPLE OF DAYS IS BECAUSE OF EARLY INDICATIONS THAT THE WHITE HOUSE MAY BE WILLING TO COME TO A DEAL WITH CHINA, BUT THAT NEEDS TO BE FINALIZED. I THINK, BEFORE THE ECONOMY IS OUT OF THE WOODS OR IF THE MARKET WERE TO RECOVER MORE OBVIOUSLY. IT’S SO CHALLENGING IN THIS ENVIRONMENT TO KNOW WHAT DIRECTION THE MARKET IS GOING TO GO IN, BECAUSE POLICY HAS BEEN CHANGING SO RAPIDLY AT THIS POINT. WELL, SO, PAUL, TO THAT POINT, YOU KNOW, WE HEARD THE TREASURY SECRETARY SAY HE BELIEVES IT’S GOING TO BE LIKE A 2 TO 3 YEAR TIMELINE FOR THE FULL REBALANCING OF THE U.S. AND CHINA WHEN IT COMES TO THE TRADE. HE MADE THOSE THOSE REMARKS TODAY. SO, YOU KNOW, IF IT’S GOING TO BE A 2 TO 3 YEAR TIMELINE BEFORE WE EVEN GET TO A DEAL, HOW DO YOU POTENTIALLY EVEN TRY TO TO PLAN FOR THAT? AND YOU KNOW, WHAT DO WHAT DO COMPANIES DO WHEN THEY’RE LOOKING AT CAPITAL EXPENSES, INVESTMENTS, IF IT’S GOING TO BE THREE YEARS UNTIL WE SEE A DEAL? I WOULD HOPE IT’S MUCH SOONER THAN THAT. BECAUSE MAKE NO MISTAKE ABOUT IT, CHINA IS STILL A REALLY CRITICAL IMPORT AREA FOR A LOT OF BUSINESSES OUT THERE IN THE UNITED STATES, AND WE CONSUME A LOT OF GOODS THAT COME TO CHINA OR COME TO THE U.S. FROM CHINA, AND VICE VERSA. CHINA REALLY NEEDS THE AMOUNT OF CONSUMPTION THAT THE U.S. PROVIDES. SO PERHAPS IT MAY TAKE 2 OR 3 YEARS TO GET TO A PROPER BALANCE OF TRADE. HE MAY BE ALLUDING TO, BUT THE IDEA OF OPERATING UNDER 145% IMPORT TARIFFS AND EVEN PRESIDENT TRUMP HAS ALLUDED TO THIS, TOO, IS BASICALLY AN EMBARGO AT THIS POINT. SO THE HOPE WOULD BE IT COMES DOWN TO A LOWER LEVEL. IT’S ANYONE’S GUESS AS TO WHAT THAT FINAL PERCENTAGE WOULD BE, BUT CERTAINLY 2 TO 3 YEARS WOULD BE EXTREMELY ECONOMICALLY CHALLENGING. AGAIN, DEPENDING UPON WHERE THAT RATE SETTLES, 0% IS OFF THE TABLE. IT SEEMS LIKE. BUT 145% IS JUST UNSUSTAINABLE. OR IT’S JUST NOT EVEN OPERABLE. YEAH. AND THEN PAUL, LASTLY, I WANT TO ASK YOU ONE OTHER THING. YOU MENTIONED POLICY. SOME OF THE MARKET MOVE TODAY MAY HAVE BEEN BECAUSE OF THE SOFTENING WHEN IT COMES TO PRESIDENT TRUMP AND THE FED CHAIR, JEROME POWELL. HE SAID TODAY HE HAD NO INTENTION TO FIRE THE HEAD OF THE FEDERAL RESERVE. HOW MUCH DOES WALL STREET NEEDS TO BUILDING WHEN IT COMES TO THE FED? FED POLICY? AND WHO’S RUNNING THAT? IT’S SO CRITICAL. THE FED IS REALLY AN A ORGANIZATION. HISTORICALLY, THE PRESIDENCY AND THE CABINET HAS SORT OF STAYED AWAY FROM, YOU KNOW, GOING AFTER THE FEDERAL RESERVE. SO HAVING THAT REASSURANCE THAT THERE WILL NOT BE A SHAKEUP IS REALLY CRITICAL TO THE UNITED STATES POSITION AS THE ECONOMIC POWER GLOBALLY. SO HAVING THAT REASSURANCE FOR INVESTORS IN THE ECONOMY IS REALLY TREMENDOUSLY IMPORTANT. ANY UNSTABLENESS HURTS THE DOLLAR HURTS THE U.S. TREASURY. IT’S REALLY QUITE SIGNIFICANT. ALL RIGHT, PAULINE WITH AR