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I think I know where this is coming from but the news certainty hit the market from left field today.

Bloomberg is reporting that the Trump administration is discussing ways to restrict portfolio flows into China’s stocks. Chinese companies traded in the United States were under pressure in today’s trading as traders and investors, operating without any details, decided to take some money off the table. Shares of Alibaba Group Holding (BABA) for example, closed down 5.09% and shares of Tencent Holdings (TCEHY) finished down 2.60%.

The market would have been down more–the Standard & Poor’s 500 closed down 0.53% and the Dow Jones Industrial Average was off 0.25%–except that most of Wall Street decided that this was 1) a non-starter, and 2) just another attempt by the Trump administration to store up bargaining chips ahead of the resumption of talks on finding a negotiated end to the U.S.-China trade war.

The odds are that Wall Street is right in its conclusions–which doesn’t mean that more news won’t emerge on this possibility ahead of the resumption of talks.

As many on Wall Street were quick to point out, restricting U.S. portfolio flows into China makes no sense since the Chinese portfolio of U.S. investments, especially the Chinese portfolio of U.S. Treasuries, gives China way more leverage in this area. Sure, the Trump administration could whack a few dozen points out of Alibaba’s share price but China has the ability to disrupt Treasury auctions at a time when the United State is trying fund a $1 trillion budget deficit.

The lack of details in today’s news also contributed to a conviction that what we were seeing from the White House was a leak designed to add a new negotiating chip to the U.S. side of the table. In other words, this isn’t a serious proposal that anyone has really game out, but just an attempt to rattle the Chinese ahead of the October talks.