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Insights News From the (Trade War) Front
May 14, 2019
- The S&P 500 fell 2.4% Monday for its worst day since January 3, alongside increased worries that the ongoing U.S.-China trade war could broaden and last notably longer than expected.
- The bounce in global equities Tuesday, however, also apparently in part on (more hopeful) trade rhetoric, is a reminder of how sensitive sentiment is to each twist and turn in the negotiations.
- An increase in volatility-related and systematic trading strategies seems to be exaggerating short-term market swings — we expect these bursts of volatility to remain a part of the investment landscape.
- Our base case remains that the U.S. and China will resolve this dispute as it is in both sides’ political and economic interests; our somewhat more defensive posturing should help us navigate through the volatility relatively well.