Cumberland Advisors Market Commentary – Osaka and the DMZ

Author: David R. Kotok, Post Date: June 30, 2019
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Ceasefire:  An agreement to temporarily stop shooting while trying to reach a truce

Market Commentary - Cumberland Advisors - Xi & Trump

Truce:  A more durable cessation of shooting while antagonists attempt to reconcile differences and reach a peace treaty

Treaty: An agreement which is then memorialized and signed by both sides

The US and China seemed to have tentatively achieved a treaty when Xi visited Trump at Mar a Lago. Then more shooting started.  The US and China had a truce after Buenos Aires, or so it seemed. Then more shooting started. Now after Osaka we have a ceasefire. We shall see. Here is a Bloomberg analysis of each side’s ceasefire position: https://www.bloomberg.com/news/articles/2019-06-29/u-s-china-trade-truce-side-by-side-comparison-of-statements .

The US and North Korea have had a ceasefire for decades. It has been occasionally broken by shooting. We don’t have a truce, only optics. Will there be a truce? We shall see.

A stock market relief rally because of an Osaka ceasefire will also see a likely reduction in Fed rate-cut expectations. How do these two things balance each other? We shall see.

Meanwhile, we still have some cash reserve in our US stock market ETF accounts.

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