- Dow Jones Industrial Average (DJIA) futures fell 50 points ahead of the bell on Thursday.
- Significant roadblocks between the US and China have dampened prospects of a trade deal.
- Former Credit Suisse CIO said talks are at risk of breaking down before Christmas.
Dow Jones Industrial Average (DJIA) futures slumped lower in premarket trading Thursday, pointing to a weak stock market open. It comes as the US and China struggle to resolve major sticking points in the ongoing trade war battle.
Michael O’Sullivan, former CIO of Credit Suisse Wealth Management, sees a breaking point coming before Christmas.
All the little parts of the deal are beginning to come apart and it wouldn’t surprise me if we have another rupture as we head into Christmas.
Dow futures fall 50 points
US-China trade deal before Christmas? Don’t bet on it
Trump and Xi Jinping are struggling to find middle-ground on three major parts of the trade deal.
First, China is reluctant to commit to the $50 billion agriculture purchases touted by Donald Trump. Second, the US is pushing for deeper protections on intellectual property rights. Third, China insists that Trump rollback the existing tariffs on Chinese exports.
“If you look at the underlying concerns, intellectual property, access to Chinese markets, etc… None of that has been resolved” – O’Sullivan.
At the same time, both Trump and White House advisor Larry Kudlow have refused to back down over the rollback of tariffs. As a result, there’s very little chance of a meaningful agreement in the near future.
“To me it looks at very, very best like we’ll just get a cosmetic…