ECONOMIC SILUET: China really is the new Brexit

Kamis, 17 Oktober 2019

China really is the new Brexit

THU, OCT 17, 2019

YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC

AS OF THU, OCT 17, 2019 • 12:14 ET

DJIA		26979.46
		-0.08%	-22.52

S&P 500		2993.60
		+0.13%	+3.91

NASDAQ		8136.31
		+0.15%	+12.13

EDITOR'S NOTE

...because Brexit isn't so painful anymore! We may actually have a deal.

And in fact, S&P 500 futures were popping along with the British pound on this news earlier. The pound sterling has jumped about 6% this week and surged over $1.30 this morning on word that U.K. and EU officials reached a withdrawal agreement.

There's still plenty of complexity before this thing is over, though. Borders (i.e. customs checks in the Irish Sea) are a key stumbling block, and Northern Ireland's DUP (Democratic Unionist Party) has already rejected this deal in part for that reason, which has moderated the market's excitement somewhat. The loss of the DUP's support could also jeopardize the agreement's passage in Britain's House of Commons on Saturday.

And if I say anything further about this, my head starts to ache, so perhaps my excitement was premature.

Meantime, on China...heavy sigh. Today, Chinese officials are speaking positively about the agreement, yadda yadda. Larry Kudlow was also on CNBC earlier, bullish on the deal. Bottom line, markets are still generally giving the "trade truce" the benefit of the doubt (and probably hoping there's still a chance the December 15 tariffs are taken off).

While the deal talk is becoming tedious to follow, the much larger U.S.-China decoupling story is absolutely fascinating. We asked the NHL's commissioner yesterday if he still felt that now is the right time to expand into China (basically, "yes"), and how they would deal with anyone speaking out on the Hong Kong issue (by "relying on players' good judgment").

Ajit Pai at the FCC summed it up pretty well in this tweet: "If this is how China is willing to use its leverage over basketball, e-sports, and flag emojis, imagine what could happen if we let Chinese companies' equipment into America's #5G networks."

Stay tuned, and I'll see you at 1 p.m.!

Kelly

Kelly Evans
@KellyCNBC

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