Hold War
Submitted by Atlas Indicators Investment Advisors on December 6th, 2018
America and China are in the middle of a trade skirmish. Representatives from the two nations are working diligently to overcome the disagreement. Most recently, the two sides met at the G20 in Buenos Aires, Argentina. Their meeting was scheduled toward the end of the summit, and even the anticipation of the gathering overshadowed many of the other events taking place. Considering these are the two largest economies in the world, this shade seemed reasonable.
As best as I can tell, the only agreement reached was to wait. America was scheduled to increase tariffs from 10 percent to 25 percent on roughly $200 billion of goods next month. For now, that is on hold until March 2019. This provides the two sides time to agree on several important issues. The ambitious to-do list includes but is not limited to forced technology transfer, intellectual property protection, cyber intrusions and theft, as well as agriculture. That is a lot to unpack in such a short time. But hold on, there’s more.
Another North American nation has found itself it the middle of an American/Chinese skirmish. Canada is currently holding the chief financial officer of Huawei Technologies at the request of the U.S. for allegedly violating sanctions against Iran. China is demanding her release, and (as of this writing) the U.S. is not willing to oblige. Now the whole world is holding its breath, wondering how this round of negotiations will play out.
How these issues all end is anybody’s guess, but the headline’s lately read more and more like a piece of fiction. Unpredictable variables like the ones above help Atlas rationalize utilizing a proprietary approach to our managed portfolios. There is never any way of knowing how market participants will behave when headlines cross their computer screens, so we diligently observe reactions and reduce risk exposure when our process suggests doing so is prudent while reintroducing risk when the opposite is true. Sometimes holding on during turbulent markets is necessary, and other times focusing on holding on to your wealth is even more important. Atlas can help you decipher the difference.
