Markets across the globe are having a great week, as the two main sources of economic uncertainty have been lifted.
Late on Thursday last week, it became clear that the UK’s Conservative government had won a landslide victory in the country’s general election.
This means that the latest Brexit deal is the final one, and that the UK will officially be leaving the European Union in January, 2020. This ends the three-and-a-half-year long story of Brexit, full of twists and turns as negotiations dragged on, were cancelled, completed, reopened, and more.
Finally, we might be free of having to hear about Brexit all the time.
Then, last Friday, even bigger news hit. The White House and China announced that the parties had agreed to a “phase one” trade deal.
As part of this deal, both sides agreed to cancel billions of dollars’ worth of new tariffs meant to go into effect this past Sunday, December 15, and reduce others that were already in effect.
The deal is a clear success for the U.S. China will buy more from American farmers, energy companies, and factories, and has agreed to step up protections against Chinese companies stealing trade secrets from U.S. businesses.
But we may be getting far less than we bargained for with this deal.
Because China just instituted a new policy that could make any intellectual property protections toothless.
No one’s talking about it.
But you need to see how it could affect your investments.
Historically, China’s smaller companies have been vastly outperformed by its huge companies. That’s about to change. Little known amnesty programs are providing a literal unfair advantage for China’s small cap stocks.