China Trade Truce, Vietnam in the Spotlight

I know this will sound un-American, especially around Independence Day. But I have enjoyed following the Cricket World Cup. Think baseball, but with only two bases, no foul territory and no seventh-inning stretch. (There are, however, drink breaks.) The pitcher is allowed a running start, and hits that travel farther are worth additional runs. The cricket lexicon includes a number of colorful terms, including yorkers, beamers, sillies and cow corners.

Americans exposed to cricket often complain about the slow pace of the game. Matches in the one-day format used for the World Cup can take more than eight hours to complete. Yet the periods of relative calm are punctuated by moments of drama; those watching can be held in considerable suspense.

The leaders of the G-20 countries met last week in Japan, and the gathering provided a moment of drama. Presidents Xi and Trump agreed to send delegates back to the bargaining table to seek a resolution of the long-running trade dispute between China and the United States. The negotiations should provide a period of relative calm, which is preferable to the series of shots the two nations have been exchanging.

But there remains considerable suspense over the ultimate outcome of the trade conflict, which might be enough to tip the global economy into a recession.

Weekly Economic Commentary - Chart 1

It has certainly been a whirlwind couple of months on the trade front. As April gave way to May, expectations for an accord between China and the United States were rising. Plans for a midyear summit meeting to celebrate the achievement were being formulated. Major equity markets had regained all of the ground lost in the fourth quarter of 2018, and new records were within reach.