In an interview with CNBC, President Trump’s top economic advisor Larry Kudlow highlighted the Administration’s growing frustration with China’s seeming lack of interest to reach any deal in the ongoing trade dispute. As the US and China continue to drift apart in terms of reaching a potential trade deal, so too have the stock markets of both countries. Below, we highlight the YTD return of the S&P 500 versus China’s benchmark Shanghai Composite Index. While the two indices started off the year tracking each other relatively well, the gap between the two has steadily widened and even picked up the pace ever since the President announced the first round of tariffs against China in early March. Through Wednesday, the YTD gap between the two indices is over 20 percentage points in favor of the US, and that’s before even taking the decline in the value of the yuan into account.

With the President’s intent focus on the performance of the stock market under his tenure, you can bet that as long as this trend continues, there will be no urgency on the part of the US to make much in the way of concessions, especially after relaxing restrictions on the ZTE ban and seemingly getting nothing in return.