Volatility an Ongoing Concern
The major indexes have been racked by volatility in recent sessions as the reality that a tangible and permanent trade deal is necessary has been settling in with investors. The probability of reaching an agreement didn’t improve after news broke of Wanzhou’s arrest.
Trump and Jinping met at the G-20 Summit in Buenos Aires, putting global markets on pause as the two economic superpowers met to hopefully ameliorate their trade differences. As part of the agreement, both nations agreed to withhold imposing further tariffs on each other for 90 days while they work out a firm, ironclad deal.
The U.S. agreed to keep the current 10% tariffs on over $200 billion worth of Chinese goods while an agreement is negotiated, but will increase to 25% if no agreement is reached prior to the 90-day deadline.
“It would be premature … to consider that the volatility in the stock market will disappear and that a sustained new uptrend has begun,” said Bruce Bittles, chief investment strategist at Baird.
“Fourth-quarter earnings reports will soon be forthcoming accompanied by important guidance figures for 2019,” Bittles said. “Additionally, uncertainty lingers over trade talks with China as does the impact of the slowdown in global growth on the domestic economy.”
Related: Market Volatility to Continue Into 2019?
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