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A new dilemma for Trump

Updated: Nov 26, 2019

The biggest news yesterday was the Pan-Democrats won the votes of Hong Kong election for district councils. It delighted the people around the world, but not 100% for Trump I guess. Trump has been always satisfied himself by keeping a good relationship with Xi JP. He has been in the pickle on whether to sign the Hong Kong's right bill, and hesitate for the reason of China's trade deal. It seems the result of the votes in Hong Kong will through him in a new dilemma.


If he has been keeping conversation with Xi in a personal level as he said, the new condition makes it harder for him to sign the bill. Because the other end of the line may say: look, we let the poll happen and didn't interfere their original system, so you don't have the reason to let the bill pass...But if Trump doesn't sign the bill he will absolutely lose his stake in the political race in 2020. Otherwise, if he signs it, it may not look that reasonable from the point of view of a personal friend with Xi, and it may lead to more uncertainty in the deal with China.


It seems that highlighting and bragging the personal relationship with the head of a rival country is not a good strategy after all? At least for now. His personal connection seems complicated the situation. If he shows too much consideration, the deal with China may simply less likely happen. This should be overwhelming the stock market if it happened one month earlier. The upside is that the market seems not so sensitive as it used to be to the China deal as the earning numbers showed more confidence recently.


But, will the optimistic rally become vulnerable when it goes too fast and too high? If this is the time, would this Hong Kong bill dilemma impacts the market? We don't know yet.


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