The US – China trade war

Although there’s no doubt that the US is economy is doing well,  seems that China and the US are not likely to reach an agreement. Washington Post has an article on US – China trading issues. President Trump has declared that the trade policies have contributed to the 41% economy growth. However, the race of which one will be the global innovation leader continues. We will see whether China can match up with the US’ additional tariffs.

 

    Christine-Poole on trade noise

Navigating the trade noise. A lot of geopolitical situations. S&P 500 is up 0.5% since end of January. It is range bound. Global economies are growing led by the US. Earnings growth is coming in very well. Canada not quite as well as the US. The trade issues with China and USA are manageable. May see more inflationary pressures going forward because of trade tariffs. This may have an effect on interest rates. Certain sectors will be more impacted than others because of tariff such as auto sector. Everyone is facing higher input costs. Market has little patience if there is a miss or guide lower.

Trade issues mean that companies have higher input costs, which are passed down to consumers, and from there we can see inflation pressure and that affects interest rates.