Wall Street Analysts Can't Agree If the Trade War Threat Is Real
Wall Street analysts, like markets, can’t agree on whether there’s a global trade war brewing.
(Bloomberg) -- Wall Street analysts, like markets, can’t agree on whether there’s a global trade war brewing. Some say President Donald Trump is simply bluffing with another $100 billion in tariffs on Chinese goods, while others fear broad economic ramifications.
Here’s what some are saying:
Jeopardizes Global Economic Order
"We suspect many will continue to look for data points to support The Art of the Deal - because otherwise this impulsive, unilateral escalation is so unimaginably reckless that it could place the global economic order in the balance," Cowen’s Chris Krueger writes in a note. China may respond by selling U.S. Treasuries, currency devaluation, or seeking a rare earth ban.
It’s Just Political Rhetoric
"We urge investors to ignore this latest Trump statement," Evercore ISI’s Terry Haines writes. "It is patently political rhetoric designed to show the great U.S. agricultural breadbasket, most of which is Trump country, that Trump will defend its interests strongly against Chinese threats as U.S. politics enter the midterm elections season with Republican Congressional majorities at stake."
Probably Won’t Be a Trade War, Maybe
"We still think a trade war can be avoided, but our confidence has been shaken; Donald Trump is itching for a fight and the Chinese will not tolerate public bullying from him," Horizon’s Greg Valliere writes. Markets might be able to shrug off trade concern if there’s a good jobs report this morning or an agreement on Nafta, he says.
It’s Only Going to Get Worse
"We continue to believe headlines are likely to get worse before they get better," writes Ed Mills at Raymond James. "The market is not pricing in the Chinese investment restrictions that are being developed by the Treasury Department -- which could have a more significant impact, especially for the technology industry."
To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.net.
To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, Catherine Larkin, Courtney Dentch
©2018 Bloomberg L.P.