Why a U.S./China Trade Resolution Bodes Well for Stocks

On a week where the Dow tacked on another 1.4%, Scott Garliss, John Gillin and Greg Diamond make sense of the “Walmart Week” amid securities’ relative strength vs. oil and gold’s woes, while other commodities like copper slip into an undeniable bear market. The hosts jump into the new developments in the China trade war. Emerging markets continue to suffer, with Shanghai down 4.5% for the week. Scott talks about how the trade war is affecting institutional investors, and how that could move the markets if/when things get worked out. He also gives listeners a timetable of the next step in these negotiations. Greg explains that the trade war has been going on for a lot longer than many think, and how China can continue to offset tariffs from the U.S. Greg tells listeners the one thing that could force China to the table for serious negotiations. John goes into what sectors are being rotated into, and where investors are putting their money at the moment. John and Scott discuss the importance of transparency from companies, and why investors should stay away from companies reaching for growth in bad areas. John runs through some of the struggling emerging markets, from Qatar's $15 billion investment in Turkey to Venezuela's hyperinflation. Greg explains what's going wrong in Venezuela, despite having the world's largest oil reserves. Greg explains the problems with the long period of low interest rates, and how it led to inflated debt in emerging markets. John runs through Constellation Brand's massive investment in a marijuana growing company, and Greg asks if the large tobacco companies could be next to invest. With earnings season all but wrapped up, Scott lists two key developments he’ll be watching this week. A couple of big events: the U.S. trade representatives’ hearing that runs through Monday, where up to 370 people will be testifying on the next round of potential trade tariffs – There's $200 billion in potential penalties which have been dangled in negotiations. Secondly, Chinese trade representatives are coming to the U.S. Wednesday and Thursday to test the waters.