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How Investors Should Approach Positive Headlines Around U.S.-China Trade War

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Let's talk about the U.S.-China trade war. 

Over the weekend, Vice Premier Liu He said that the U.S. and China have made "concrete progress" towards a trade deal. 

Brian Levitt, global market strategist at Invesco, and Tony Owusu, reporter for TheStreet, weighed in on how the positive headlines will impact the markets.

So, are headlines enough to reassure investors and calm a volatile market until the U.S. and China have a formal meeting?

"You would think so. It seems like Washington is finally kind of getting out of the way of Wall Street, whether it's Trump tweeting at his political enemies or the democratic candidates talking about tax and billionaires that above a hundred percent. It seems like Washington's been the way for a while with earning season in the pipeline. It seems like we're finally gonna be able to get back to fundamentals," said Owusu.

But, should investors even react to positive headlines from either side at this point?

"So my view on this is that investors got way too negative on the trade situation this summer and that was long rates going down significantly and the inverted yield curve. All of that was the mid expectations of a really, really bad outcome. The macro-environment is not that bad, right? The global economies in reasonably good shape. What you needed was a better policy mix or at least direction for a better policy mix. We've gotten that from the Fed. The administration seems to be backing down somewhat on this stance on in ever-increasing trade conflict. That's improvement. The yield curve has steepened the bit. Long rates are up a bit. That is a better mix for markets," said Levitt. 

Watch the full video above.

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