What’s happening: President Donald Trump tweeted that the trade deal remains “fully intact” after Navarro’s remarks in a Monday interview with Fox News sparked confusion.
At one point the interviewer described Trump’s efforts to make progress on the trade deal and asked Navarro, “Is that over?”
“It’s over,” Navarro answered. US stock futures and the yuan tumbled.
Navarro later said his statement was taken “taken wildly out of context,” and assurances from the White House have been sufficient to placate investors. US futures are now back in positive territory.
But the episode makes clear that traders remain laser-focused on what the White House says about the US-China relationship, even as attention is focused on the economic recovery and trajectory of coronavirus infections.
Watch this space: China’s compliance with the terms of the “phase one” trade deal is an open question given the economic fallout from coronavirus. China committed to increasing purchases of US goods and services by at least $200 billion over a two-year period.
Not everyone thinks the deal is on track.
“There appears no realistic way China is either willing or able to stick to the deal’s terms,” Rabobank global strategist Michael Every said in a note to clients Tuesday.
That’s left investors on edge about Trump’s next move, especially as he trades blame with China over handling of the pandemic.
“The question is how will the president confront China to revive his narrative,” said Sebastien Galy, a strategist at Nordea Asset Management.
Politics could become more of a force on Wall Street as strategists look ahead to the second half of the year. Analysts expect the US election in November to hang over the stock market as a key source of uncertainty.
“While the pandemic is likely to remain the most important driver of equity markets both in the US and elsewhere, we think the US election could play a key role in the US equity market’s performance,” Jonas Goltermann, senior economist at Capital Economics, told clients this week.
The calculus: Investors are weighing the prospect of greater predictability in the event Trump loses against the potential for higher corporate taxes should the Democrats take the White House and Congress.
Apple’s move to in-house chips send shares soaring
Why it matters: Dubbed “Apple Silicon,” the new chips will give Apple more control over updates and user experience, and allow apps to work more seamlessly between the iPhone, iPad and Macs, my CNN Business colleague Kaya Yurieff reports.
Apple plans to launch its first computer with the new chips by the end of this year and expects the entire transition to be completed in two years, according to CEO Tim Cook.
Investor insight: The news helped send Apple shares up…