Trade and Tariffs Monitor – 12.31.2018

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  • The focus on a China Trade War narratives accelerated even further in December.
  • As in our November update, we remain concerned with the conflation of the trade narratives with national security issues. Words like “Nuclear” and “Troops” are very connected and near to the core in December, just as “Taiwan Straits” and “South China Sea” were core in November.
  • We think this has the potential to maintain the heightened focus of markets on this topic.
  • As outlined in the In Summary note from January 6, however, we think that the emerging connectivity between trade/tariffs and central banking communication policy will be worth monitoring. We remain cautious about active risk-taking on trade/tariff themes, but with the current narrative structure would revisit this view based on communication from central bank missionaries linking those themes with interest rate policy.

Narrative Map

Source: Epsilon Theory, Quid

Narrative Attention

Source: Epsilon Theory, Quid

Fiat News Index

Source: Epsilon Theory, Quid

Narrative Sentiment

Source: Epsilon Theory, Quid

Key Articles

As fear rises on Wall Street, strategists warn the worst is yet to come

With conflicting signals, market is a hybrid of a bull and a bear

Factbox: Contrasting Chinese, U.S. statements on trade war agreement

US STOCKS-Wall St advances as trade optimism gathers steam

China renews U.S. soy purchases as trade tensions ease

December Early Indicators Show China Slowed for a Seventh Month

Decades of Growth at Risk as China Car Sales Keep Dropping

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