Financial commentator Charles Gasparino has floated a rumour that the Trump administration is considering delisting Chinese stocks in the US as another tariff hit.
The SPX500 is stable above the 2021 high at 4,818 but there is potential for tariff-led shock headlines and that level is key support with 5,000.
Gasparino works for Fox Business and his report said:
“Sources: Trump Administration is moving toward a possible delisting of Chinese public co shares on US exchanges. Incoming SEC chair Paul Atkins is likely to take up the delisting issue when he officially takes office. The possibility of delisting Chinese companies is fueled by both the ongoing trade war with China and the increasing enthusiasm within the GOP-led Congress to pursue such delistings.”.
The issue may take a while to play out and may be part of the Trump bargaining ploy. But Zerohedge said that such a move could see US investors forced to dump $800bn of stocks in the short-term. It is also a possible reason that foreign investors have not been heavily invested in the country this year.
Some hedge funds were bullish on Chinese stocks in the last two years after stimulus measures loomed. They would be forced to dump those stocks in the short-term and look for other avenues to trade in China’s exchanges.
In the latest tariff news, Fed Chair Jerome Powell has said that it is “highly likely” that they will cause some inflation. That could force the central bank to reconsider its rate cut strategy.
The White House is now negotiating with dozens of countries after the 90 day pause. Japan has sent delegates for negotiations and it may mean the worst of the tariff shock is over, but with some economic effects still coming from the rates already applied.
