The first paragraph in yesterday’s blog post captures our view of near-term prospects for the market:
“Clearly, global equities have little upside (and notable downside) potential as long as Washington holds the line on its current trade stance – despite a generally good macro setup (particularly in the U.S.).”
The responses, encapsulated below, to CNBC’s latest Global CFO Council Survey support that view:
“…. nearly 65 percent of North American CFO respondents said U.S. trade policy is likely to negatively impact their firms over the next six months; 20 percent of CFOs indicated the impact would be “very negative.”
“Not one global region was seen as worse than “stable” for the sixth straight quarter. The United States was seen as “improving” for the eighth straight quarter.”
The next snippet from yesterday’s blog post speaks to the market’s prospects if/when trade issues are intelligently resolved:
“In the end, and thank goodness, there’s little doubt in my mind that the market’s unquestionably negative (yet not severe) response(s) to any and all pushes to make trade matters worse will ultimately have the President seeking counsel with the legitimate counselors in his orbit. And when he follows their advice, as long as not too much macro damage has been done in the meantime, the market will likely see a swift and violent move to the upside.