U.S Markets Analysis — 11/06/2019

Golden Dragon
Nov 6 · 3 min read

The U.S markets are quiet today, but in an uncomfortable way that seems like the silence used by movie directors when they want to catch the spectator off guard to put a jump scare, we might be living the same narrative in the U.S economy. With the earning season cooling down, the Fed signaling that will leave rates unchanged for now, and the U.S bowing to China demands as the U.S President Donald Trump desperately grasps for holding its political support.

Yesterday the GOP suffered a severe loss in Kentucky and Virginia in off-year elections, despite President Trump’s efforts to support the Republican candidates. In Kentucky, the Republican Matt Bevin lost its reelection attempt, to the Democrat candidate Andy Beshear by a thin margin. The state that in 2016 voted in its majority for the Republican President doesn’t seem to be so supportive of Trump indications anymore.

Virginia in another had shows how the GOP has failed to swing the state giving the control of the House of Delegates and the State Senate to Democrats, something that didn’t happen occurred for 26 years, the state holds a closing relationship with democrats since 2016 where the state-supported Clinton on the election run.

These outcomes from elections give us the perspective on how the GOP supports its start to stumble near to a crucial year for Trump and explains why China is so comfortable playing the time card with the U.S, like announced today that the meeting to sign the “phase one deal” would be delayed from November to December. Dragging the negotiations, it hurts Trump’s political base and credibility, and since the Chinese government has the upper hand on the Trade war by holding closing relationships with U.S allies countries. Due to its economic influence through initiatives like the Silk Road and investments, like the one announced today where China it’s willing to invest $10 Billion on Saudi Aramco IPO, narrowing the relations with another U.S ally on the Middle East, nulling then the possibility of U.S use its foregein influence as leverage. What brings the trade war battlefield to limited options as the ones used by the U.S government, like raising tariffs and blacklisting companies.

Now the question its how long the Trump administration will endure to this choking situation since it already gives its signs that it’s cracking by considering roll back tariffs on $112 billion in Chinese goods. The point that the U.S markets are the protagonist of this thriller direct by China and Trump that drown investors in an undigestable silence that it’s only waiting to catch them off guard.

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Disclaimer: All content of Golden Dragon has only educational and informational purposes, and never should use it as financial advice

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