By Jeff Mason and April Joyner
Trump’s lunchtime address at the club, which has hosted U.S. presidents including Woodrow Wilson and John F. Kennedy, as well as foreign leaders like former Soviet President Mikhail Gorbachev https://www.econclubny.org/legacyarchive/-/blogs/1992-mikhail-gorbachev and Chinese Premier Li Keqiang https://www.ncuscr.org/content/full-text-premier-li-keqiangs-speech, will be closely watched by investors anxious for any positive news about his administration’s long-running trade war with China.
“You can expect the president to highlight how his policies of lower taxes, deregulation, and fair and reciprocal trade have supported the longest economic recovery in U.S. history with record low unemployment, rising wages, and soaring consumer confidence,” White House spokesman Judd Deere said. He declined to give further details.
U.S. stock markets have hit record highs in recent weeks on hopes the White House and Beijing are close to a trade deal that could go a long way toward dispelling the uncertainty dogging the global economy. Last week, officials from both sides said they had a deal to roll back tariffs, only to have Trump deny any deal was agreed on.
A positive speech on U.S.-China trade would likely satisfy market participants even without specific details of the “Phase 1” agreement under negotiation, said Jim Paulsen, chief investment officer at The Leuthold Group in Minneapolis.
“It still feels like we’re pretty close to having something done,” Paulsen said on Monday. “Even if it’s meaningless, it will be meaningful.”
More than 1,350 people are expected to attend the speech, according to the club’s spokeswoman, Erin Klem.
Not everyone thought Trump’s speech to the 112-year-old club, which has served as a venue for major economic policy addresses, would be seen as constructive by investors.
Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:) in Austin, Texas, had little hope Trump’s speech would mark an end to uncertainty. It remains notoriously hard to predict whether Trump will take a positive or negative tone on trade.
“Whatever uncertainty exists today will exist tomorrow also,” he said, adding that if Trump were to say he is not rolling back any tariffs, the market would react negatively.
Gregory Daco, chief U.S. economist at Oxford Economics, estimated the trade war had chopped about eight-tenths of a percentage point off U.S. growth. After starting the year with growth running at 3.1%, output throttled back to 1.9% in the third quarter, with weak business investment factoring heavily in the slowdown.
Daco questioned whether a limited trade deal with China would be enough to draw businesses back off the sidelines.
“Do you as a business make a decision that now the environment is clearer, there are less tariffs, so now you’re more likely to invest? Or, if after the last three years, you’re still more cautious and say ‘let’s wait this one out,'” Daco said. “I’d favor the latter.”