How the China Tariff Pause Sent Our Stocks Soaring

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To my surprise, we got a move over the weekend in China-U.S. trade talks that, quite frankly, I did not expect. I don't know that anybody was really willing to bet that we would see the outcome that we did with U.S. dropping tariffs to 30% on Chinese goods for now, and China dropping their tariff on U.S. goods by 10%. It looks like the U.S. has also agreed to drop the eventual non-reciprocal standard tariff down to 10% — the same level that the United Kingdom and a couple of other most favored trading partners got stuck with — ending talk of the 34% reciprocal tariff.

This puts the U.S. and China in a good place to continue talking, according to most of the economists I've had a chance to speak with today. And as I said, nobody really saw this outcome, including me. I thought there was potential for China to get angry, for the U.S. to make excessive demands, and for the talks to blow up over the weekend. That did not happen.

We have an environment where China and the United States are now going to continue talking. There is a framework for those continued talks, and there is even a chance that Donald Trump and Xi Jinping will speak directly sometime later this week. It's a 90-day pause in the tariff policies to allow talks to get going.

Equity investors clearly love it. We are up over a thousand points on the Dow Jones Industrial Average right now. It goes without saying that it has been really good for our REIT portfolio. We were already having a pretty good week, but now we've got stocks bouncing up strongly in the total return portion of the portfolio.

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