Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Trade Negotiation in Jeopardy After China Reneged its Commitment

Stock-Markets / Financial Markets 2019 May 09, 2019 - 05:09 PM GMT

By: ElliottWaveForecast

Stock-Markets

Summary

  • The odds of trade war escalation rises after Trump sent a pair of tweets threatening to increase tariffs to Chinese goods.
  • If there is no deal by this Friday, the tariffs to Chinese goods will rise to 25% from 10% on $300 billion. Additional $325 billion of Chinese goods will also get 25% tariff.
  • The rapid deterioration is due to the reversal of China’s commitment to address the U.S. core complaints.
  • U.S companies with huge presence and sales in China, like Apple, can suffer if there’s trade war escalation.
  • Elliott Wave Analysis on Apple suggests another major correction can happen.

Over the weekend, President Trump sent a pair of tweets threatening to increase tariffs from 10% to 25% on $200 billion of Chinese goods. This increase will happen on Friday this week. In addition, Trump also said he will implement 25% tariff on $325 billion additional Chinese goods.

Trump sent a pair of tweets again today provoking China by saying he’s very happy with the additional tariffs

These tweets left no room for the U.S. to back down. U.S. Trade Representative Robert Lighthizer also made it clear that additional tariffs will apply this Friday despite the ongoing talk. Lighthizer is one of China hawks in Trump administration. He has pushed for an enforcement mechanism

News start to surface that the U.S. lose their patience after China backtracks their commitments to address U.S. complaints. Beijing returned a draft agreement to Washington late on Friday night with reversal to concessions on core U.S demands. The U.S. complaints center on the areas of intellectual property and forced technology transfer. There are several other areas such as market access for cloud computing firm and also currency manipulation. China has apparently gone back on all the major concessions it had made during the negotiation.

Chinese negotiators said they could not change the domestic laws, as such changes will be major and can’t be done quickly. They also accuse the U.S demands becoming harsher as the negotiations drag on. Although Vice Premier Liu He will still visit Washington on Thursday, the odds that the two sides can reconcile after this event seems to be slim at this stage.

For months, investors and market seem to believe that the two largest economies are close to making a deal. The markets are trading at near high or all-time high when President Trump sent the tweet on Sunday. The news immediately sent the stock market and commodities into free fall on Monday open. The sell-off can continue if there’s no deal by Friday.

$AAPL Apple Elliott Wave Daily Chart

Apple has a lot of stake if the U.S and China trade war escalates. China is one of the company’s biggest markets. Revenue from Greater China market made up 20% of Apple’s total revenue of $229.2 billion. In terms of operating profit, Greater China accounted for 21.9% of Apple’s total operating profit in the last financial year. China is also one of the manufacturing base for Apple’s products, such as iPhone, iPad, and Macbook.

Apple had a big 39% drop from October 3, 2018 high last year. It has recovered nicely after bottoming on January 3, 2019 low. However, it’s now at the area where it can end the cycle from January 3, 2019 low and turn lower in 3 waves at least. If the U.S. escalates the trade war this week, the stock can start to turn lower and at least pullback in 3 waves to correct cycle from January 3, 2019 low.

Conclusion

The months long trade negotiation between China and U.S. is wrapping up this week. Recent deterioration of the talk due to China’s reversal of its commitment is a cause of concern for investors. The rising odds of escalation this week sent the stock market and commodities tumbling. The selloff can potentially continue if there’s no agreement by this week. U.S. companies with significant stake in China, such as Apple, can suffer in the case of a trade war escalation.

To see the latest count in U.S stocks and Indices, forex, and commodities, feel free to join with the 14 days FREE Trial.

By EWFHendra

https://elliottwave-forecast.com

ElliottWave-Forecast has built its reputation on accurate technical analysis and a winning attitude. By successfully incorporating the Elliott Wave Theory with Market Correlation, Cycles, Proprietary Pivot System, we provide precise forecasts with up-to-date analysis for 52 instruments including Forex majors & crosses, Commodities and a number of Equity Indices from around the World. Our clients also have immediate access to our proprietary Actionable Trade Setups, Market Overview, 1 Hour, 4 Hour, Daily & Weekly Wave Counts. Weekend Webinar, Live Screen Sharing Sessions, Daily Technical Videos, Elliott Wave Setup .

Copyright © 2019 ElliottWave-Forecast - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in