On the US/China Trade Breakthrough

The US and China announced a breakthrough in trade negotiations, with the US suspending further tariff increases and the Chinese immediately resuming purchases of US agricultural products. Trump got the better of the deal, with China making immediate concessions while the US holds the status quo. At the present frozen level of tariffs, the cost to US firms is more than compensated by this year's weakness in the Chinese currency. There was no mention of currency policy nor privatization, Trump's two "big asks," suggesting that they have been conceded by the US. Negotiations over the next 90 days will no doubt be rocky, but this is the all-clear signal that nobody is going to walk off a cliff. That means we've seen the lows in equities, and the year should finish strong, especially for China and the emerging markets.