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A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web

U.S. president Donald Trump announced measures to severely limit Huawei Technology sales in the U.S., and this is a bigger deal than it looks on the surface.

Jefferies research analyst Laban Yu, in a report I featured in Wednesday’s Globe Investor newsletter, wrote, “Where China will not budge much, in our view, is on the right to utilize industrial policy.”

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China’s leadership is making huge efforts to move the country’s economy up the value scale – replacing low skill manufacturing jobs with high-tech, high-margin business and Huawei is a big part of that. China will not be pleased today,

“The White House on Wednesday initiated a two-pronged assault on China: barring companies deemed a national security threat from selling to the U.S., and threatening to blacklist Huawei Technologies Co. from buying essential components. If it follows through, the move could cripple China’s largest technology company, depress the business of American chip giants from Qualcomm Inc. to Micron Technology Inc., and potentially disrupt the rollout of critical 5G wireless networks around the world.”

“Trump's Huawei threat is the nuclear option to halt China's rise” – BNN Bloomberg

“Premarket: U.S. sanctions on Huawei send stocks reeling; yields fall” – Report on Business

“Canada says it won’t be pushed to ban Huawei after Trump signs executive order” – Report on Business

“Iranian fuel oil shipped in violation of US sanctions is unloaded in China, tracking data shows’ – South China Morning Post

“China says any further action against companies like Huawei could escalate tensions” – CNBC

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Citi global macro strategist Jeremy Hale is touting the success of “stagnation trades” as U.S. economic growth slows,

“our line of thinking remains that the US economy is slowing not accelerating to the upside. This implies that (structurally) the long ‘Goldilocks’ trade could be fleeting whilst long ‘stagnation’ trades have rarely disappointed in the past 6 months. OECD leading indicators are close to their lowest levels since the GFC and we struggle to find any rationale why these trends may all of a sudden reverse … [developed market] equities look particularly vulnerable given heightened trade war risks … Bottom line: We are considering taking profit on our long 10y future position but hold a medium term bias for lower yields and advise investors that are not already long, to wait for a correction to re-engage longs.”

“@SBarlow_ROB C: “stagnation’ trades have rarely disappointed in the past 6 months” – (research excerpt) Twitter

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Reports from Mexico indicate progress directed on removing U.S. steel and aluminum tariffs for both Mexico and Canada,

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“Jesus Seade, Mexican deputy foreign minister for North America, told Reuters by telephone that a deal to remove the so-called Section 232 tariffs was “very close” but he wanted Canada to be in the same position in its negotiations with Washington. “What we’ve been talking about for a week,” he said, “is eliminating the 232 without any quotas,” noting that it was “very possible” Canada could sign up to a “similar” deal.”

“Mexico says it is close to U.S. metals tariff deal, waiting for Canada” – Reuters

“Canada, U.S. nearing agreement to lift steel and aluminum tariffs, cease trade war” – Report on Business

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Tweet of the Day:

Diversion: “Canadians are primed for some Trump-style populism” – Maclean’s

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