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Today, Thursday December 12, just five minutes after stocks opened for trading in New York, President Donald Trump, tweeted that the U.S. and China are very close to signing a “big” trade deal. “They want it, and so do we!” he tweeted.

Of course, last week President Trump said that he liked the idea of waiting until after the 2020 elections in the U.S. to sign a pact.

Today, the S&P 500 Index advanced to an intraday high and the MSCI All-Country stock index to its first record since January 2018.

Financial markets really don’t have any choice but to go with the most recent words. A deal would send stocks higher and playing chicken with the White House and losing wouldn’t go over well with any money manager’s investors.

My own read is that this most turnabout fits with a recent pattern that has seen Trump pushing back against a likely House vote for impeachment by trying to demonstrate that he’s still in charge. So we’ve had the USMCA trade agreement pushed ahead with support from House Democrats with even though Senate Republicans aren’t happy with revisions to the pact, and a military spending bill that includes paid family leave for Federal workers (again against significant Republican opposition.) The next step in this pattern would be a Part 1 trade agreement and a decision to delay the December 15 tariffs.

Last week I put the odds of a Part 1 deal at 60/40. This week I’d say 70/30 in favor.

As of 12:30 p.m. New York time the Standard & Poor’s 500 was ahead 0.54% and the Dow Jones Industrial Average had climbed 0.43%. The NASDAQ Composite was up 0.33% and the Russell 2000 small cap index was higher by 0.39%.

U.S. Treasuries were certainly acting like a deal was likely with the yield on the 10-year Treasury moving up 10 basis points to 1.89% (on lower demand for Treasuries ahead of a risk-off China deal.) The yield on the 2-year Treasury was 1.67%.

The dollar moved higher, essentially erasing yesterday’s drop, with the Dollar Spot Index (DXY)  gaining 0.27%.

Gold fell 0.17% to $1472.50 an ounce and silver moved up 0.60% to $16.95 an ounce.

U.S. crude benchmark West Texas Intermediate gained 1.26% to $59.50 a barrel. International benchmark Brent crude rose 1.29% to $64.54 a barrel.