Trump ramped up his China rhetoric the same week U.S. officials flew to Beijing for meetings ahead of Xi's Washington visit. Two things happened at once. Both were useless.
The White House spent the week calling China every name in the book. Currency manipulator. Trade cheater. Job killer. Then they sent a delegation to Beijing to sit in a conference room and pretend words matter. This is like screaming at your wife during the drive to marriage counseling. Everyone knows how this ends.
Xi planned a trip to Washington. Trump needed to look tough before Xi arrived. So he talked tough. Officials still flew to Beijing because the meeting was already scheduled and nobody wanted to cancel the catering. They sat across from Chinese officials who had just watched Trump call their country a threat to civilization. I'm sure that went great.
Retail traders saw this headline and bought both Chinese stocks and U.S. defense contractors. Diversification. One side wins no matter what happens. Genius-level thinking from people who think meetings prevent wars. These are the same people who believe earnings calls contain new information.
The technical picture here is perfect. Draw a line on the chart. Any line. It predicted this. Two countries hate each other but keep meeting anyway because that's what countries do. They talk. They accomplish nothing. Then they schedule another meeting. This has been happening since 1972. The chart knew.
Trump's strategy was to insult China publicly while negotiating privately. This works if the other side is stupid. China is not stupid. They invented gunpowder while Europe was eating dirt. They watched Trump yell, nodded politely at the officials, then went back to doing exactly what they were doing before.
The S&P moved 0.3% on the news. That's the market pricing in a future where nothing changes except the volume of useless statements from both sides.
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