Wharton School finance professor Jeremy Siegel says President Donald Trump can't blame Jerome Powell for a bad stock market now that the Federal Reserve chairman has appeared to walk back his comments on interest rate hikes.
Siegel told CNBC that the pressure is on Trump "more than ever" to reach a trade agreement with China as he meets Saturday with Chinese President Xi Jinping at the G-20 summit in Buenos Aires, Argentina.
"[Trump] doesn't want to be the cause of a bear market in 2019," Siegel said.
For his part, Trump said he sees “some good signs” ahead of his dinner Saturday with China’s Xi Jinping as the two nations seek to avert an escalating trade war, Bloomberg reported.
“We’ve already spoken and we’re working very hard,” Trump told reporters Friday, when asked about his upcoming meeting with the Chinese president. “If we can make a deal, that would be good. I think they want to and I think we’d like to so we’ll see.”
Trump added that Larry Kudlow, his top economic adviser, and Kudlow’s staff are “dealing with them on a constant basis.”
“There’s some good signs,” Trump added. “We’ll see what happens.”
U.S. and Chinese officials have been working for weeks on the contours of a possible deal for the two leaders to be announced following their dinner on Saturday on the sidelines of the G-20 summit and a road map for talks to follow.
Those discussions, according to people familiar with them, have centered on the possibility of a truce in which the U.S. would delay ramping up tariffs on China in exchange for Chinese concessions. The two leaders would also agree on a “framework” for further talks, U.S. officials such as Commerce Secretary Wilbur Ross have said publicly.
To be sure, U.S. stocks seesawed between slight gains and losses on Friday, as investors kept away from making big bets ahead of a trade meeting between the United States and China that could decide the course of a bitter trade dispute between the two economies, Reuters reported.
Markets have been roiled by conflicting headlines in the run up to the high stakes trade talk, but found some relief after U.S. Trade Representative Robert Lighthizer said he would be surprised if Saturday’s dinner between Trump and Xi “wasn’t a success”.
On Thursday, however, Trump had said he was close to making a deal but was not sure if he wants to do it.
Meanwhile, Beijing said it hoped to persuade Trump to abandon plans to hike tariffs on $200 billion of Chinese goods to 25 percent in January from 10 percent at present.
“The next big thing that would cause the markets to rally would be a de-escalation of the trade war and until that point the markets will follow a bit of a holding pattern,” said Rick Meckler, partner, Cherry Lane Investments, in New Vernon, New Jersey.
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