What to expect from Trump Asia Trip

Trump will hardly be able to change China's position on North Korea after his visit to Beijing this week, but he can make some progress on trade deals between the two countries. On Wednesday, Trump will meet with Xi Jinping and, in addition to discussing possible solutions to the problem in North Korea, he will also insist on cutting the trade imbalance between the two countries, which is currently in favor of China. For this reason, many market participants expect Trump to declare billions of dollar deals to overcome the big difference.

Based on the business delegation that will visit China and other Asian countries, we expect deals to focus on the sale of US energy, agricultural and aviation products. Chinese CEO Boeing, Cheniere Energy, DowDuPont, and the US Soy Export Council will attend the meeting in China.

Meanwhile, Goldman Sachs CEO Lloyd Blankfein is in the delegation with insurers such as PartnerRe. This has speculated that China can declare financial sector liberalization after the visit - although expectations of significant structural changes are quite low.

Earlier on Monday, Trump said that "Japan can remove North Korean missiles with US military technology." Trump said Japan would be well-equipped against a North Korean attack after it bought new equipment from the United States. He added that the purchase of military equipment would lead both to employment in the United States and Japan. These words speak enough about Trump's intentions to sell as much military equipment as possible.

During the Asian visit we expect if not all, at least some of the above listed companies will be able to win a trade agreement with any of the countries that Trump will visit. This, in turn, will lead to significant revenue, and hence a better performance of the respective shares. We remain on track, following the latest news from the visit and every new deal will be a good incentive to invest in the company.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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