In an interview with CNBC, veteran trader Art Cashin echoed the worry of investors on whether a U.S.-China trade deal is actually on the cusp of materializing or not.
The idea of the trade war continuing would certainly send the markets south. Combined with fears of slowing global growth and a reduction in corporate earnings, an ongoing trade war would certainly add to the growing wall of worry for investors.
“If it began to look like a semipermanent trade war, the market would definitely sell off,” said Cashin.
Furthermore, the severity of a sell-off would depend on how long the trade war continues–to Cashin, the longer, the deeper the sell-off.
“If it looks like we are looking at two years or something like that, with us going nose to nose with some major trading partners, then I think the sell-off could be more severe,” Cashin added.
Adding to the market fretting is the IMF cutting its global growth forecast to the lowest level since the financial crisis, citing the impact of tariffs and a weak outlook for most developed markets. According to the IMF, the world economy will grow at a 3.3 percent pace, which is 0.2 percent lower versus the initial forecast in January.
In addition, the global volume of trade in goods and services will increase 3.4 percent in 2019, which represents a drop from the 3.8 percent gain last year. The IMF, however, did mention that recent policy implementations like the U.S. Federal Reserve keeping interest rates steady are positive signs moving forward.
How will this slowing global growth affect bonds overseas, such as in Europe? In this interview with Dana Weeks, Jordan Kotick looks to major bond market trends abroad for what may be next in the U.S. Treasuries market.
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