'Take profits very quickly, which would be my sense,' says Stephen Roach, Yale senior fellow and former Morgan Stanley Asia chairman
‘When the dust settles, there will be some realization that this is not a fundamental breakthrough — that the conflict will be enduring. Take profits very quickly, which would be my sense.’ That’s Stephen Roach, Yale University senior fellow and former Morgan Stanley MS, +1.04% Asia chairman, talking on CNBC’s “Trading Nation” this week about the fallout from a U.S.-China trade deal.
“The bulk of the progress will be on the bilateral trade front, which, quite frankly, as an economist I find the least appealing because that’s really a reflection of our own macroeconomic imbalances,” Roach said. “If we can squeeze the Chinese piece, that’ll just send those goods to another higher cost producer. So this is sort of a cosmetic deal, at best. But it’s a deal, and it’s better than nothing.
“I don’t think they’re in desperate shape,” he said. “The downside pressures are transitory; they’ll be able to stabilize and then show some gradual improvement.” Not much selling going on Thursday, with the Dow DJIA, +0.28% Nasdaq COMP, +0.28% and S&P SPX, +0.27% mostly bouncing around breakeven.
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