"Lee noted that when the president suggested raising tariffs on Chinese imports to as high as 150%, it triggered last Friday's sharp selloff. The U.S.-China trade relationship remains the largest single variable influencing global market sentiment. Any escalation in tariffs or restrictions affects industrial supply chains, agricultural exports, and corporate earnings guidance across multiple sectors. According to Lee, even the most cautious economists acknowledge that China depends more on U.S. consumer demand than the reverse."
"We are now entering the fourth year of a broad rally that has lifted nearly every major U.S. index. Lee described it as "fixing to start the fourth year of what's been a pretty strong bull market." I agreed that any easing of trade tensions could propel equities higher, especially if the agreement resolves key disputes such as railroad and soybean trade barriers."
When the president suggested raising tariffs on Chinese imports to as high as 150%, the market saw a sharp selloff. The U.S.-China trade relationship remains the largest single variable influencing global market sentiment. Escalating tariffs or restrictions affect industrial supply chains, agricultural exports, and corporate earnings guidance across multiple sectors. China depends more on U.S. consumer demand than the reverse, and the United States remains China's primary export destination, making a negotiated deal likely. Any limited understanding could stabilize prices and help extend the ongoing bull market, now entering its fourth year. Market outlook depends more on diplomacy than on corporate earnings in the near term.
Read at 24/7 Wall St.
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