The 10-Year Treasury note fell below 1.7% today, fueling fears of global recession in some corners. Headlines such as "The Dow Is Down...Because Recession Fears Are Growing" from Barron's and are too much, too soon.

Troubling Data? Yes...

The U.S.-China trade war has cast a long shadow over virtually every major financial market. Yes, it is concerning to see treasury yields plumb such depths, and flight to safety makes sense when the top two economies in the world dig their heels in.

Today, stocks fell on lower than expected 10-Year Treasury note yields, though as of 2:00 p.m. EDT, the NASDAQ has just edged back into positive territory. Gold broke through the $1,500 barrier and oil October Brent crude fell 3.2% to $57.04 a barrel, down over 20% since April.

...But Perspective Is Called For

In all of this data, it's easy to lose the signal for all the resulting noise. Apart from Europe's manufacturing weakness, virtually all of the negative market data in recent weeks and months is attributable to the U.S.-China trade conflict turning into a genuine trade war. It's no longer tit-for-tat tariffs and refusals to buy certain goods, now it's formal accusations of currency manipulation that could turn a trade war into a currency war, which could be a globally destabilizing event.

Could be, but won't.

President Trump has an election to win. He will likely push his advantage until it becomes too politically costly, then strike a deal with Beijing. After the election, he can force China back to the table. There are plenty of market makers, economists, and financial writers who suffer from Trump Derangement Syndrome, and their trades, predictions, and words are colored by a fear--and even a perverse hope--that Trump will sink the global economy.

The short-term hope for the U.S. (and the rest of the world who don't want China stealing their technology) is that China's vaunted ability to suffer through hard times has softened due to the spoils of its recent prosperity. It is a virtual impossibility that Xi Jinping and the State Council cave in or even seek to restart talks, but there is the possibility that things are worse behind the communist curtain than falling Chinese stock indexes and weakening export data show.

The bottom line is that any changes on trade are now solely in Trump's hands, and his primary motivation is the economic success of the United States.

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