Before the second quarter comes to an end, traders from around the globe will be tuning into the G-20 summit in Japan which starts today and ends tomorrow. President Trump and President Xi are expected to meet on Saturday and continue their discussion on trade.
While no one is really expecting a deal to be hashed out tomorrow… they are hoping to hear that significant progress has been made. After all, stocks have been rallying this entire week on that belief.
But like I told you the other day when I unveiled Total Alpha, it won’t affect my trading.
You see, I have strategies for up, down, and sideways trading markets. It’s one of the beauties of trading options… as well as, the massive profit potential they offer.
And you know what?
While no one knows what the outcome of the trade talks will be this weekend… you better believe I’ve placed my bets.
That said, there are several ETFs I’m currently watching, they include: TLT, SPY, QQQ, along with individual stocks like Apple, Alibaba, and much much more.
Well, the G-20 Meeting has kicked off, as World leaders have gathered in Osaka… and there’s a lot at stake.
The main focus is on the meeting between the POTUS who is set to meet with China’s Xi Jinping, Russia’s President Putin, and other world leaders.
Now, President Trump has already been making headlines at the G-20 summit, and jokingly told Putin, “Don’t meddle in the election”… so it’s going to be an interesting meeting.
Although Trump will be in meetings for the next two days, there’s one that the market really cares about, and that’s between U.S. and China… both leaders are set to meet at 11:30 AM tomorrow in Osaka.
Is Another Trade War in the Cards?
This morning, when reporters asked Trump about the meeting with Chinese President Xi, the POTUS noted he didn’t promise China that the U.S. would hold off on increasing tariffs if they met in Japan.
He noted, “We’ll see what happens and what comes out of it… A lot of people are talking about it.”
Now, Xi will probably provide the POTUS with a list of preconditions before China will agree to any trade deal…
… and that could be a bad thing.
You see, Trump is looking to “win” this trade war and doesn’t want to bend the knee. If these preconditions are too much of an ask… then Trump may threaten China with tariffs again.
However, the markets are thinking these two leaders will probably agree to temporarily pause any trade war escalations… but Trump has suggested he might be looking to hit China with tariffs if he doesn’t like what he hears.
A truce is likely, but having a set trade deal is a big stretch…
… and the markets may be overly optimistic about a positive outcome, as we’re still near all-time highs.
You see, back in December 2018, Trump met with Xi at the G-20 summit in Buenos Aires… and they agreed to halt tariffs… but a lot has changed since then.
It’s probably going to be the same story…
… U.S. and China pause on the trade deal… but you never know with the POTUS.
Since the G-20 meeting in December 2018, we’ve seen both sides impose tariffs. The POTUS has imposed tariffs on $250B of Chinese imports, while China retaliated and raised tariffs on $60B of U.S. imports.
Trump has already threatened to increase tariffs on $300B of Chinese imports… and it’s very possible we see Trump raise tariffs on a piece of Chinese goods.
The Markets Will Also be Focused on Huawei
In addition to trade being the main focus… the U.S. sanctions on China’s tech giant Huawei will also be a talking point.
Now, there have been reports that China’s President Xi will be looking to include Huawei in any deal China is looking to make with the U.S… and it might be included in the list of preconditions that Xi will slide over to Trump.
China thinks that any new agreement should be fair…
… but as we know, Trump doesn’t play to be fair… he plays for the upper hand.
That’s a risky gamble for China because Trump has already stated if he doesn’t like what he hears, he’ll look to raise tariffs.
Only time will tell.
I’m going to be keeping an eye on a few names today and next week.
What I’m Watching
Yesterday, I got into a trade in QQQ, and let clients know about my thoughts in the overall market.
… as the markets are nearing a short-term Death Line.
There are a lot of warning signs flashing right now and the market may be too optimistic about the meetings… and in the past, that’s proven to be short-lived, I don’t think this time it’ll be any different.
Here’s what I’m seeing in QQQ – the tech-tracking ETF.
Now, I’m not putting all my chips into this trade, as there will be a lot more opportunities after the G-20 summit.
Some names to keep an eye on are Alibaba (BABA), Apple (AAPL), shipping companies like FedEx (FDX), and other Chinese stocks.
Not only that, with this massive rally in gold… any negative news that comes out of these meetings could potentially spark another run higher, so the SPDR Gold Trust (GLD), the VanEck Vectors Gold Miners ETF (GDX) and gold stocks are also on many traders’ watchlists.
Additionally, the iShares 20+ Year Treasury Bond (TLT) – one of my favorite ETFs to trade – will be on the radar.
There’s going to be a lot of action at this meeting, so even though I have a position in QQQ… I’m going to wait and see before I throw on any large positions… and I’m going to be updating clients on my moves if I see any clear trades around this meeting.
Now, if you missed out the other night as I revealed Total Alpha and some of Wall Street’s most profitable trading secrets… click here or below to watch. This replay won’t be up for any longer, and today is the LAST day it’ll be open.