With Trump making it clear on Sunday night that he was staring at the plunging US equity futures in sheer horror, tweeting that “my stock market gains must be judged from the day after the Election, November 9, 2016, where the Market went up big after the win, and because of the win“, the US president appears to have reached desperation point to keep US stocks higher early on Monday at the G7 meeting in France, and the result was that just before 3am ET Trump – having decided to say anything to push futures higher, told reporters that the Chinese government called his team in Washington Sunday not once but twice, in a bid to restart talks on trade.
“China called last night our trade people and said let’s get back to the table,” Trump said on the sidelines of the Group of 7 meeting in Biarritz, France. “They understand how life works.”
According to Trump, U.S. officials received two “very productive” calls from the Chinese but declined to say whether he’d spoken directly to Xi. “They want to make a deal,” he said, adding that the U.S. would accept the Chinese invitation and return to the negotiations.
“We’re going to start very shortly and negotiate and see what happens but I think we’re going to make a deal.”
“China called last night our top trade people and said let’s get back to the table.”
— Bloomberg TicToc (@tictoc) August 26, 2019
There was just one problem: none of this actually happened least according to China.
Asked by reporters about Trump’s remarks shortly after the American president spoke, Geng Shuang, a spokesman for the Foreign Ministry in Beijing, said that he wasn’t aware of any weekend U.S.-China phone calls. He repeated China’s position that the trade war should be settled through negotiation, adding that China resolutely opposes to new US tariffs, and noting that US tariffs violates the accord struck between leaders in Osaka.
Then, just before 6am, China’s Global Times editor in chief Hu Xijin confirmed that “based on what he knows”, there were no phone calls between the US and China in recent days, suggesting that Trump indeed “hallucinated” the 2 phone calls, which only took place in his head in hopes of keeping stocks from plunging.
Based on what I know, Chinese and US top negotiators didn't hold phone talks in recent days. The two sides have been keeping contact at technical level, it doesn't have significance that President Trump suggested. China didn't change its position. China won't cave to US pressure.
— Hu Xijin 胡锡进 (@HuXijin_GT) August 26, 2019
Sure enough, despite China’s consecutive denials of Trump’s story, S&P 500 futures reversed losses after Trump’s comments, and soared over 60 points from session lows.
Adding an additional boost to the futures ramp was a comment made by Trump just after 530am ET that “the U.S. is in a much better position now than ever for a deal with China”, although how that is even remotely true at a time when both sides just ramped up tariffs on each other is absolutely bizarre.
And just to really confuse everyone, when asked if he could delay the planned tariffs on China, Trump said “anything is possible”, denying the White House denial from Sunday, according to which Trump was having second thoughts about not having hiked tariffs on China sooner.
In short, a total mess as Trump now grapples tick by tick to literally fabricate a narrative that keeps stocks from plunging as he is convinced a market crash would kill his reelection chances.
Source: Zero Hedge