These developments seem set to place serious barriers in place to stall the advancement of the trade war truce which was agreed at G20. Huawei is a giant of technology in China and the Chinese government is unlikely to react well to the latest diplomatic incident.
What happens next?
Given the uncertainty caused by volatility levels over recent months, there does not seem likely to be any positive change to the situation in the near future, when it comes to stocks. Although FOREX trading has remained relatively stable, equities have been hardest hit. Traders are becoming disillusioned with the constant see-saw effect.
The situation seems set to continue as the trade war issues are unlikely to be brought to a conclusion quickly. The recent information suggesting the potential decision to stall on further increases in the interest rate into 2019 could have a positive effect but it’s yet to be seen whether the stall will happen and what impact it will have on volatility levels.
One thing that is certain is that the appearance of the death cross pattern is not a good sign. It’s usually an indication that the downward trend is set to continue and that the low point will continue further into the future. The markets are set to bounce to the end of the year for certain. Given the current environment, the bounce is set to continue well into 2019 at the very least.
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