Thomas Lehr (Flossbach von Storch) | The US-China trade conflict is keeping markets on tenterhooks. Should we therefore avoid equities? We encourage investors to be courageous. Quality prevails. An argument in favour of long term investment.
Shaun Riordan │ The Hong Kong protests have now entered their tenth week. Over the weekend protestors are reported to have fought running battles with the police in the Metro system. The police have had recourse to batons and tear gas. The dangers for Hong Kong´s political and economic future are clear. But the dangers are much broader than Hong Kong. Markets should be watching carefully.
JP Marin-Arrese │ Trump’s volatile mood is wreaking carnage on investors’ confidence. It is a fact that the White House tenant longs to trigger huge uncertainty, even panic, among investors. Yet, by brushing away any hope to strike a truce with China he has outdone himself.
Iñigo Isardo, Link Analysis│An exchange rate conflict threatens to complicate US-China trade conflict. As we anticipated yesterday, the escalation of tensions in the trade conflict between the US and China impacted negatively on western markets. China has responded with the largest devaluation of its currency the yuan in more than a decade.
Íñigo Isardo (Link Securities) | This week will be affected by the uncertainties of the trade conflict between the US and China after the latest “turn of the screw” introduced by US President Donald Trump into the trade negotiations. Last Thursday Trump announced on Twitter the imposition of 10% tariffs from 1 September on 300 Bn$ of imports from China which so far have not had to pay tariffs.
Manuel Moreno Capa (Director of GESTORES) | China already has its Nasdaq, its stock market for technology companies – the STAR index. Well, with certain differences: only 25 companies are listed on it, compared to the 3,000 listed on the Nasdaq. But it does not matter. The wind from the East blows hard and will drive technology funds, high risk products, but also with elevated potential returns in the medium and long term.
Esty Dwek (Natixis) | Ongoing weakness across manufacturing and trade shouldn’t be a surprise, but service sectors continue to hold up, even showing a small rebound in June. Overall, we expect slower but stable growth around trend levels for the major economies.
At the G-20 Leaders Summit in Osaka, Japan, Chinese president Xi Jinping proposed several measures to further open his country’s market. For example, to enact a Foreign Investment Law at the beginning of 2020 that will introduce a penalty system for IP infringement.
J. P. Marín-Arrese | US Federal Reserve Chairman Jerome Powell faces the dilemma of choosing the right path, confronted with conflicting data and forecasts. While the US economy grew at a booming 4% rate in the first quarter, inflation trails far behind the Fed’s objective and salaries fail to pick up despite historically low levels of unemployment. Moreover, the trade tug-of-war with China is denting confidence in consumers and investors alike. Should the conflict turn worse, the economy might suffer a harsh blow.
Alicia Garcia Herrero and Jianwei Xu (Natixis) | After several peaceful months, the US-China trade has been taken back to central stage following Trump’s unexpected announcement to ramp up tariffs from 10% to 25% on Friday if no deal is reached by this Friday. Fears of resurged uncertainties spread among investors, tumbling world market over the past few days.