“I think the market is of the belief that it’s more likely than not, there’s going to be a deal. Until that confidence is shaken, the market will do what it’s going to do. We had a decent pullback here, so I think the markets aren’t panicking now because it’s still possible there’s a deal,” said Boockvar.
Boockvar said the “Trump put” has been in the market, but at the end of the day Trump can’t control the course of the stock market though he has made the right comments at the right time. “He tweeted the Saturday before New Year’s Eve that trade discussions were doing great,” he said. “He tweeted that and because it was a concern, we had a rally.”
“The only concern he can alleviate now is are we having a deal or not having a deal? The markets don’t like Mr. Tariff man,” he said, referring to a name Trump gave himself.
The deal is important to both countries, so strategists expect there ultimately to be some agreement. Trump is also heading into an election, and the theory is he would like a trade deal that would help the economy, not a trade war that would hurt growth and the stock market.
“We expect both countries will come to the table. There’s always been a hard line taken by the president on issues. He’s very vocal. I think the market has been conditioned to that. If the market is taking this in stride a lititle bit, then it’s likley they believe there will still be a deal in the not too distant future and we would not get tariffs on the othe r$300 billion.”
Trump has said he was going to get the paper work started on another round of tariffs, on $325 billion in Chinese goods, and the fear is that would hurt the economy since the tariffs would be directly on consumer goods.