Chinese Tariff Torture

US The mid-terms remain a lock for the GOP in the Senate, and a toss-up in the House. GDP was helped by inventories and hurt by imports -- which offset each other, and will offset again when eventually unwound. The weak-spot was the fall-off in CAPEX. Earnings season has been stellar, except that market leadership by the FANG stocks has come into doubt. Equity risk premia are attractive globally, and US PE multiples have almost corrected to bear market territory. The curve is now discounting a less aggressive Fed, and Clarida has emerged as "adult supervision" to Powell. The Saudi alleged murder puts pressure on oil prices, as does slackening demand in emerging markets and China. The Italian "October surprise" is here, but new growth prospects are dead. Trump is letting China suffer while its economy weakens, with the consequence of global spillovers as in 2015-16. The biggest global risk is an outright recession in China.