US: Trade war represents a risk to the US stock market – NFB


 Matthieu Arseneau, analysts at the National Bank of Canada point out that US corporations could get hit in the market with an escalation of the trade war between the US and China.

Key Quotes:

“The U.S. stock market has been the third top performing stock market among the 49 countries in the MSCI ACWI index since early 2017 (following Brazil and Saudi Arabia). This development is certainly a source of pride for the current administration as we head into an election year. The ongoing trade war, however, represents a risk to the U.S. stock market.”

“We’ve argued several times that the U.S. corporations are not immunized against a trade war escalation as foreign sales account for no less than 43% of total revenues for the S&P 500 listed companies.”

“Stocks of firms with the largest foreign exposures are still outperforming by a significant margin the ones tilted towards the domestic economy. This advantage can wane fast if trade tensions do not abate in the coming weeks. Recent S&P500 drawdowns have indeed been felt more acutely for these corporations.”
 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD retreats, holds on to modest intraday gains

Having spent the day within familiar levels, the EUR/USD pair is once again retreating from the 1.1070/80 resistance area. Dollar in better shape against most major rivals after post-Fed’s correction.

EUR/USD News

GBP/USD above 1.2500 as Juncker says there could be a deal by October 31

EU’s Juncker said that if the objectives of the backstop are met through alternative arrangements, the backstop won´t be needed, adding that there could be a deal by the October deadline. GBP/USD hits fresh 7-week highs in the 1.2530 region.

GBP/USD News

USD/JPY stays in negative territory near 108 despite rising US stocks

The USD/JPY pair rose to its highest level since early August at 108.48 during the American trading hours on Wednesday after the Federal Reserve refrained from giving any hints regarding the next policy move despite announcing a 25 basis points rate cut.

USD/JPY News

Gold consolidating at technical levels awaiting next catalyst

Precious metals were higher on Thursday. Gold prices climbed from $1,489.13 to $1,504.60. The gold ratio travelled between 83.87 and 84.66 with a bullish bias as the yellow metal surges on. 

Gold News

The Federal Reserve Keeps its Options Open

The Federal Reserve’s two rate cuts in as many months have satisfied market expectations for action and will give the governors time to determine if a full reduction cycle is warranted.

Read more

Forex MAJORS

Cryptocurrencies

Signatures