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Escalating US-China trade war – triggering (another) correction in share markets. The world’s two superpowers have been talking, but still the US and China trade war grinds on.

The lack of progress and uncertainty is having an impact on the global share markets. According to Dr Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital, the key points are:

 

  • The trade war between the US and China is escalating, posing a rising threat to global growth.
  • Although we remain of the view that a deal will be reached, the risk has increased.
  • Share markets may need to fall further in the short term to remind both sides of the need for a deal and get them talking again.
  • However, we regard the fall in share markets as another correction rather than the start of a major bear market.

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