Earnings could soothe investor worries

LAST week, stocks swung wildly up and down as investors tried to gauge whether bellicose rhetoric between the US and China was the start of a trade war or a prelude to a major trade deal, a dynamic that could persist unless and until a deal emerges.

The only thing that could stave off further volatility this week would be a blockbuster start to earnings season from JPMorgan Chase and other banks.

Last Monday, global markets tumbled after China fired back at the Trump administration, vowing to levy tariffs on US$50 billion of US imports, including soybeans - a cornerstone of the economy in many of the Midwestern states that voted for President Donald Trump. For much of the balance of the week, Larry Kudlow, the new appointee to lead the US National Economic Council, went on television to reassure US investors that all the tariffs touted by Mr Trump and Chinese leaders were merely bargaining chips for "back channel" talks.