Displaying items by tag: trade war

(New York)

Wall Street analysts area all over the map about where stocks are headed next year. Some firms are bearish (Morgan Stanley), some are neutral, and some are bullish. Put Bank of America in the latter category, as the bank says that stocks are set to surge in the first couple months of 2020. Calling the year “front-loaded”, Bank of America analysts say that the S&P 500 should rise by 5.2% by March 3rd. Michael Hartnett from BAML says that the combination of easing trade worries, diminished Brexit fears, and loose monetary policy should combine to cause a “melt-up” in risk assets.


FINSUM: We like this call. All the fears for the winter seemed to have ebbed, and there will be a few months before election worries really kick in.

Published in Eq: Total Market
Tuesday, 10 December 2019 08:14

The Bear Market Looks More Likely Now Than Ever

(New York)

If one thing is for sure about markets at the moment, it is that investors are less worried about the economy and less stressed about the chances of a bear market. That is exactly why the market is at risk. The market’s fear index, the VIX, jumped a whopping 16% yesterday, signaling some underlying anxiety building after a calm and positive stretch. One of the factors that is looming over markets is whether the tariff deadlines on China get delayed or not, which will be a sign of progress or failure on the trade deal. Further, fears over the election, and higher rates, are likely to dampen corporate spending and slow the economy.


FINSUM: Our worry is that the anxiety level at the moment does not seem to be matching the real risk, which ironically is when the chance of a market downturn is at its highest.

Published in Eq: Total Market
Friday, 15 November 2019 09:55

The Looming “Capital War” with China

(New York)

Hedge fund icon Ray Dalio delivered a grim speech yesterday at a gala dinner for the National Committee on US-China Relations. The investor is worried about war in all it forms. He said that “There is a trade war, there is a technology war, there is a geopolitical war, and there could be a capital war”. Famed former US Secretary of State Henry Kissinger also spoke at the event and told both sides that they must avoid a shooting war at all costs, as no side can win.


FINSUM: Everyone on both sides will hopefully be somewhat relieved if a “phase one” trade deal can be reached.

Published in Eq: Total Market

(New York)

Trump went on the record yesterday telling investors that the US and China were close to finalizing a trade deal. Markets were unconvinced. Speaking at the Economic Club of New York yesterday, Trump said “We’re close to a significant phase-one trade deal with China … It could happen soon, but we will only accept a deal if it’s good for the U.S. and our workers and our companies”. Markets held ground after the comments, but ultimately fell back as Trump offered little evidence to back up the comments of a deal being “close”.


FINSUM: In our view of this situation, a deal is never close to being done, it is perpetually on the edge of falling apart and only truly done when it is signed.

Published in Politics
Tuesday, 12 November 2019 08:46

Hong Kong on Brink of Meltdown

(Hong Kong)

Hong Kong police have warned that the city is on the brink of collapse. A police shooting of a protester on Monday has sparked a huge wave of renewed protests that have blocked roadways and caused chaos. “Over the past two days, our society has been pushed to the brink of a total breakdown as rioters went on a rampage”. The protests have turned increasingly violent in recent days as 128 were hospitalized with injuries on Monday.


FINSUM: This has no end in sight, and with tension increasing, so too are the odds that it somehow becomes wrapped up in the US-China trade war.

Published in Politics
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