00:00 Speaker A
Chinese officials are vowing to fight to the end in response to President Trump’s latest tariff threat, raising the risk of a prolonged trade war between China and the US. Meantime, Japan is taking on a dramatically different approach. Japanese stocks rebounded on the news that the country will get priority in trade talks with the US following a call between Japanese Prime Minister and President Trump. Joining us now to discuss what’s next for trade and the markets, Jay Pelowski, TBW advisor founder, and Anthony Saglimbeni, he’s Ameriprise Financial Chief Markets Strategist. Thank you both for being with us this morning. Jay, I want to start with you because I’ve been intrigued talking with you about China and the broader Asia trade, uh, the past couple of, it feels like years here. Uh, talk to me about how you view these negotiations with Japan and Japan getting kind of the first round at these negotiations. What does that tell you about an investment thesis when it comes to Japan?
01:15 Jay Pelowski
Well, I, you know, Japan is actually, uh, a market that we’ve been invested in and we think is, is appealing, uh, for a number of different reasons. And I think that the opportunity here is for capital to really repatriate out of the United States back into, uh, Japan, uh, as well as other countries, uh, such as Europe, etc. And that should really be supportive for, uh, Japanese assets. There’s an issue with a stronger yen being problematic for some of the exporters, but overall, I think the opportunity in Japan is that you have domestic capital reallocating from fixed income to equities as inflation picks up, deflation is defeated, uh, and then you have the potential for, uh, money that’s been invested in the United States to flow back, uh, to Japan. But to be honest, Madison, the, the market in Asia that we’re really focused on, uh, is China. And I think the action, uh, today is really, uh, uh, illustrative, namely, uh, Trump has threatened to double tariffs as was discussed. China said, well, we’re, we’re not going to cave, and the markets are up. And so to me, uh, that’s a sign that the markets are reading this as kind of the end of the beginning, and we’re going to be in negotiation mode, which means things are going to get better, not worse. And I think that’s why you see the market bouncing.
03:25 Speaker A
And, and so, Anthony, with this in mind, I mean, we’re talking about 50% right now, but Trump campaigned with this 65% marker that a lot of analysts were taking into account. So it seems like there could be a ratcheting higher if the negotiations don’t net out positively for what both sides are looking for here.
03:48 Anthony Saglimbeni
Yeah, I think that’s right. I mean, I think, uh, investors were kind of stumped at the beginning of all of this with the focus on Canada and Mexico, and China seemed like they were getting off. And now we have really aggressive tariffs against China, uh, which was the focus, uh, during the campaign. And so I, I, I agree with, you know, kind of the sentiment that’s here. The focus is starting to turn to China much more aggressively. Negotiations are opening up possibly with some of our other trading partners. Markets were very oversold coming into Monday. You saw a little bit of capitulation trading on Friday and a little bit on Monday. It’s obvious that the market wants some good news on trade. And so I think as we move through the coming days and coming weeks, it’s really about what can we get out of the White House that’s a little bit more positive than just aggressive tariff actions. Negotiations are a good starting point, and it’s why you’re starting to see stocks start to rebound a little bit this morning.
