It took stocks only a few minute to "price in" the latest political shock out of Washington, and as of this morning Emini futures no longer care that Mueller has a grand jury, trading 0.08% in the green with European stocks and Asian shares all little changed as investors await the looming July jobs report, which is expected to show a slowdown in hiring from 222K to 180K but will have little impact on either the Fed's thinking or the market.
China's 19th National Congress of the Communist Party - the quinquennial confab where the party selects new members of the Politburo, its ruling council - is expected to begin this fall (official dates have not yet been publicly announced). And in an effort to guarantee that the leadership reshuffle goes off without a hitch, President Xi Jinping is tightening the government’s grip on the internet to help protect the official narrative that Xi's "Chinese Dream" remains intact.
With just one day to go until the Trump administration launches the first salvo in what could develop into a full-scale trade war between the US and China, there is the issue of a diplomatic (hopefully) resolution of escalating situation in North Korea, one which Citi today said is "increasingly likely" to involve military action. On this issue, China is becoming increasingly displeased with Trump's relentless twitter badgering, and as AFP reports, "Trump-style outbursts are no way to get China to bend to the US's will."
Yesterday, the WSJ reported that the Trump administration is planning to begin a probe of what the U.S. sees as violations of intellectual property by China. Against a backdrop of Trump’s frustrations with domestic policy, sliding approval ratings and disagreement with China over North Korea, the chances of protectionist action are rising, as is the probability of a "hot", retaliatory trade war. This morning ow learn when Trump is set to fire the first shot.
While the world's eyes are focused on Syria, Russia, Ukraine, and North Korea; there is another - much more tense - fight between two nuclear powers that is getting far too little attention. The world's two most populous nations, China and India, have been engaged in a border dispute for decades but in recent months it has flared once again with a Chinese Ministry of Defense official now warning explicitly that Indian troops must leave the contested Doklam area if they do not want war.