Top brass from major corporations across the nation agree that heading into 2020, trade war concerns remain at the top of their minds. If a trade deal isn’t reached by the proposed Dec. 15 deadline for a “phase one” deal, it could remain an enduring theme that will move the markets.
Per a CNBC report, the “Business Roundtable’s index of the CEOs’ outlook fell 2.5 points to 76.7 in the fourth quarter, which remains below the historical average and indicates moderation in the pace of economic growth in the next six months.” Furthermore, the outlook for GDP is at 2.1%, which falls in line with the Federal Reserve’s estimate of 2%.
All in all, the sentiment errs on the side of caution.
“CEOs are justified in their caution about the state of the U.S. economy,” Business Roundtable President Joshua Bolten said in a statement. “While we have achieved a competitive tax environment, uncertainty surrounding trade policy and slowing global growth are creating headwinds for business. Lawmakers should expand, not restrict, trade to help boost U.S. economic potential.”
Participants comprising the index include J.P. Morgan CEO Jamie Dimon, General Motors CEO Mary Barra, Johnson & Johnson CEO Alex Gorsky, and Walmart CEO Doug McMillon.
Trade wars, in particular, could have adverse effects on the economy based on one CEO’s assertions.
“Free and fair trade agreements are vital to economic prosperity for American workers, families and communities. Nearly 39 million American jobs—one in every five—depend on international trade,” Union Pacific CEO Lance Fritz said in a statement. “Because growth in trade-dependent jobs far outpaces job growth as a whole, we urge lawmakers to engage in more trade agreement negotiations.”
Will CEO Sentiment Affect U.S. Equities?
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