The Market Is Already Picking Trade War Winners - and Losers

(Bloomberg) -- Nearly four weeks of escalating tensions over global trade have shaken up global markets, handing big returns to oil traders and leaving stock investors nursing losses.

Havens like gold and German bunds are in demand but not U.S. Treasuries, which count China as one of their biggest holders. Emerging-market sovereign debt has lost less than half a percent while corporate bonds denominated in U.S. dollars have outperformed the currency itself.

The Market Is Already Picking Trade War Winners - and Losers

Investors are scrambling to adjust to the White House’s protectionist agenda after President Donald Trump ordered $50 billion of tariffs on Chinese products last week. Meanwhile, the appointment of Iran hardliner John Bolton for U.S. national security helped drive oil’s rally.

Stocks rebounded Monday amid signs the U.S. is seeking to step back from a trade war. Treasury Secretary Steven Mnuchin told Fox News that he’s “cautiously hopeful” that China will reach a deal to avoid tariffs on $50 billion of U.S. exports, while European leaders demanded a permanent exclusion at the threat of retaliation and a deal was struck with South Korea.

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