Why Trade Tensions Are Not Driving the U.S. Stock Market? Because many Unicorns are going public in the United States this year. Secondly, U.S. banks are healthier than ever and liquidity conditions are quite good in the U.S.. So all in all, that’s far more important than trade tensions. Picture source: Bloomberg
BlackRock Geopolitical Risk Indicator for Global Trade Tensions The recent decline of the indicator suggests that investors may be more complacent about the risk and impact of trade conflicts. Source: BlackRock Investment Institute – Global Investment Outlook Q2 2019
China’s Global Acquisitions Global acquisitions by Chinese companies continue to fall, due to tight credit conditions and US-China trade tensions. Picture source: Financial Times
Buybacks Are the Source of the Rally in the Stock Market since 2009 But as trade tensions and economic slowdown worry U.S. firms, stock buybacks declined last quarter. Picture source: Deutsche Bank Global Research
S&P 500 Share Buybacks by Quarter Share buybacks have contracted for the first time since 2017, as trade tensions and economic slowdown worry U.S. firms. Picture source: The Wall Street Journal
ISM Manufacturing Index vs. ISM Non-Manufacturing Index ISM Non-Manufacturing rises to 56.9. That’s good news despite US-China trade tensions and weak global growth. When ISM Manufacturing PMI and ISM Non-Manufacturing PMI are below 50, as in 2001 and 2008, there is a recession.But when there is a divergence, as in 2016 and today, it doesn’t…
World Exports Are Contracting – May 2019 Nowadays, exports of goods and services represent 29% of global GDP and trade tensions are causing a contraction in world exports. Picture source: First Eagle Investment Management
U.S. – China Competition (Focus Risk) The United States and China will eventually conclude a trade agreement, but tensions between the two countries are structural and won’t go away any time soon. Picture source: BlackRock Investment Institute
