Good morning. Chinese officials stated yesterday that they could do without US agricultural and energy imports, should tariffs remain in place — another signal that Beijing is not backing down in the face of US pressure, and that we are entering into a massive game of “trade war chicken”. Who do you think will blink first? Email us: robert.armstrong@ft.com and aiden.reiter@ft.com. 

How bad is investor sentiment? 

The best reason to buy US equities right now is that almost everyone thinks you shouldn’t. When we suggested in yesterday’s letter that there were some — qualified — reasons for optimism about US markets, we received a lot of responses like this one, from a commenter going by “general assembler”:

A weirdly optimistic take?.?.?.?The big problem here is that unthinkable things with devastating consequences are increasingly likely to happen. Demolishing the international trade system is one thing, but what about US hyperinflation (if Trump gets his way on low interest rates), US default (the Maga crowd would love the idea of not paying their hard-earned dollars to any pesky foreigners in interest rates), and a ‘classic’ war of conquest?

The oldest rule in investing is to buy when pessimism reigns. So when Financial Times readers are talking seriously about de-globalisation, hyperinflation, default and war all in one sentence, surely it is time to buy?