'With 4 minutes to go before the close of trading and stocks within spitting territory of red for the day, someone had to take control of "price discovery" and with the FT's street cred already used up after it's "90% done" report last night, it was up to Bloomberg to preserve the "trade talk optimism" which it did when it reported fresh details on the ongoing trade deal being finalized (and we use the term loosely) between the US China, which according to Bloomberg source would give Beijing until 2025 to meet commitments on commodity purchases and allow American companies to wholly own enterprises in the Asian nation.
And here is where the "deal" gets downright farcical: according to the proposed agreement (and we again use the term loosely), China would commit by 2025 to buy more U.S. commodities, including soybeans and energy products, and allow 100 percent foreign ownership for U.S. companies operating in China as a binding pledge that can trigger retaliation from the U.S. if left unfulfilled.
In other words, any deal announced this week would be nothing more than a photo opportunity, and be completely toothless for the next 6 years. More importantly, as we noted earlier, the 5 years interval would allow stocks to levitate each and every day for the next 5 years on "trade deal optimism", putting S&P 36,000 within grasp.
S&P to hit 36,000 by 2025 rising on "China trade deal optimism" every day for the next 5 years
— zerohedge (@zerohedge) April 3, 2019
Other hilarious non-binding promises China has offered to implement by 2029 wouldn’t be tied to U.S. retaliation, Bloomberg's sources said.
And now that a "bogey" for the 2025 target has been set, the talks are continuing in Washington where Chinese Vice Premier Liu He began planned meetings with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Wednesday.'
Read more: Trump To Give China Until 2025 To Commit To Trade Deal