Sunday morning, my laptop suddenly died on me. I will be working with a less effective backup and limited resources for about 2 weeks. 
China Says Tariffs Will Go, but U.S. Doubts Remain Beijing’s announcement that the U.S. and China have mutually agreed to roll back tariffs added to optimism that the trade war is beginning to wind down. But others expressed caution.
But there were conflicting reports from within the Trump administration as to whether there was a firm commitment to reduce tariffs.
One U.S. official concurred that the two sides plan to roll back tariffs as part of an initial trade pact—which would indicate that reports this week that such a rollback was under consideration had progressed.
Others disputed that a formal rollback plan had been agreed on.
“There is no agreement at this time to remove any of the existing tariffs as a condition of the phase one deal,” said President Trump’s senior trade adviser, Peter Navarro in an interview on Fox Business Network. “The only person who can make that decision is President Donald J. Trump, and it’s as simple as that,” he said. (…)
Chinese officials have typically declined to characterize the amount of progress in the trade talks, but the officials on Thursday depicted the phasing out of tariffs as a hard-won result. Their statements could be a sign of China’s confidence that it has leverage in closing out the first phase of their deal. (…)
At a conference in Beijing last weekend, several Chinese speakers, including former government officials, said they expect disputes of different types between the U.S. and China to stretch on for decades, whatever the prospects for a near-term agreement.
“The frictions are not just about trade,” said Liu Shijin, deputy director of economic affairs at China’s legislative body. “A lot of areas [for disagreement] haven’t even started yet.”
Also reportedly said:
White House economic adviser Larry Kudlow confirmed the advance in negotiations. “If there’s a phase one trade deal, there are going to be tariff agreements and concessions,” he told Bloomberg.
“They’re just negotiating in public, trying to push this in a direction,” Navarro said of reports he said were put out by “Chinese propaganda press.” (Reuters)
Kellyanne Conway, senior White House adviser, also said Thursday President Donald Trump is “anxious” to sign the deal. (BB)
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Michael Bloomberg Prepares for White House Bid Billionaire Michael Bloomberg, the former mayor of New York City, is taking steps to enter the 2020 presidential race as a Democrat, one of his advisers said, months after saying he wouldn’t run
China’s Export Decline Eased in October China’s exports recovered a little in October, with a 0.9% decline from a year earlier compared with a 3.2% drop in September, in an early sign that global demand may be picking up as trade tensions with the U.S. ease.
Exports were down 0.9% from a year earlier, the General Administration of Customs reported, better than September’s 3.2% decline and economists’ October forecasts. Exports to emerging markets and the European Union accelerated; shipments to the U.S. remained weak, though the decline was smaller than in September. (…)
China’s exports to the U.S. in October were down 16% from a year earlier, compared with a 22% fall in September. Imports from the U.S. were off 14% in October, after a 16% decline a month earlier, customs data showed. (…)
China’s shipments to Southeast Asian countries in October were up 16% from a year earlier, beating September’s 9.7% pace. Exports to the European Union, China’s largest trading partner, were up 3.1%, after being essentially flat in September. (…)
China’s imports in October were down 6.4% from a year earlier, the customs data showed, better than September’s 8.5% drop and the median 8.6% decline forecast in a Wall Street Journal survey of economists. China’s overall trade surplus stood at $42.81 billion in October, wider than September’s $39.65 billion and the expected $42.6 billion. (…)
(Bloomberg)
Also, the OECD leading indicator suggests somewhat stronger Chinese growth going forward. (The Daily Shot)
Source: OECD, @jsblokland
U.S. Consumer Credit Usage Slows Sharply
The weakening in September retail sales reported last month was very much in evidence in today’s consumer credit report. Consumer Credit Outstanding increased $9.52 billion (4.9% y/y) during September following a $17.83 billion August gain, revised from $17.90 billion. A $15.8 billion rise had been expected by the Action Economics Forecast Survey.
Nonrevolving credit usage increased $10.61 billion (5.4% y/y) during September after a $20.05 billion August rise. It was the smallest monthly increase since May. (…)
Revolving credit usage posted a $1.11 billion decline (+3.5% y/y) after a $2.21 billion August fall. Credit provided by banks, which makes up 90% of revolving balances, rose a reduced 3.6% y/y. It was growing at a 7.5% y/y pace during the summer of last year. (…)
Fed Warns Climate Change Is A Major Threat To The Economy “Climate change has significant consequences for the U.S. economy and financial sector through slowing productivity
EARNINGS WATCH
We now have 430 company reports in. Actual earnings growth for the 430 companies having reported so far is –0.5% on revenue growth of +3.9%. The beat rate is 74%, the surprise factor +4.4% and the blended growth rate –0.6% (+1.9% ex-Energy), down from +0.3% on July 1
By comparison, after 426 reports during Q2, the beat rate was 73%, the surprise factor +5.5% and the blended growth rate +2.7%, up from +0.3% on July 1. Actual earnings growth for the 426 companies having reported was +3.6% on revenue growth of +4.6%.
Trailing EPS are now $163.81, down from $164.26 at the same time in Q2 and 0.4% lower than the $164.43 and $164.31 at the end of August.and September respectively.
Q4 estimates keep being ratcheted down to +0.7% (+2.9% ex-Energy from +5.0% last week). This is down from +4.1% on Oct.1.
FYI: Charts from Goldman Sachs:
Care for value investing? This is from AQR’s Cliff Asness: