Tuesday, June 5, 2018

ZTE: A Hint To Easing Trade Tensions

ZTE US
US - China trade negotiations included both sides playing hardball with companies caught in the crossfire. China raided Micron offices and the US banned trade with ZTE. It was just reported that tensions may be about to thaw once again.

Reuters just reported that the US is close to a deal to lift the trade ban on ZTE. The move is likely an early signpost that trade tensions are on the mend once again.

China retaliated recently by breaking into Micron offices. Both sides can likely quickly ease the pressure.

The US - North Korea peace summit and US - China trade negotiations are intertwined. As we approach the peace summit June 12th you could get a continued show of solidarity between the US and China ahead of talks to pressure North Korea into a weaker position.

The ZTE agreement hints to that storyline.

Very Bullish

The Berlin Wall fell in November 1989 and the markets stormed higher in the 1990s almost from that point. Global peace accords can let the cap off of a market that wants to go higher.

World peace especially one that opens up Asian trade is very bullish for the economy and stock market and specifically the tech sector.

We've been pointing out that the market stopped going down on bad news (rate spikes, trade tensions, etc) which meant the market wanted to go higher.

World peace would be a great excuse to let the cap off of this market.

Conclusion

Bullish



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