The US stock market has left $ 5 trillion on the table, as trading tensions over the past 17 months contributed to an effective side trade, Deutsche Bank estimated on Friday.
"While other factors also surely played a role, the trade war has been key in preventing a recovery in global growth and keeping US stockpiles tied. Foregone US equity returns from price increases for 17 months are worth $ 5 trillion," wrote Binky Chadha, the bank's chief strategist, in a Friday match, based on an annual rate rise of 12.5% (see diagram below).
Chadha's calculation is based on the capitalization of Russell 3000
a broad target of stock markets, which had a capitalization of $ 28.7 billion at the beginning of 2018. Foregone return for the 17-month index reaches $ 5 trillion .  S & P 500
in the first four months of 2019 jumped back sharply from a steep fourth quarter sales side to a full-time closure high in April. However, the index has pulled out over 6% in May and sent its first monthly decline since December and its worst May performance since 2010. The Dow Jones Industrial Average
who failed to return to the record area before May swoon, also fell more than 6% for the month.
Read: Stockmark suffers "the key" monthly reversal that requires deeper decline, says technician
May withdrawal blamed analysts to a large extent on an escalation in the US-China trade match show little probability nærtidsoppløsning. The battle between the world's two largest economies has contributed to jitters over the global and US economic growth outlook. These concerns were reinforced after President Donald Trump announced on Thursday that he would add escalating tariffs to all Mexican imports in an effort to push the country to restrict the migration of immigrants to the US border.
See: President Trump's top trade official opposite tax threat to Mexico
Chadha said tariffs are comparable to the impact of the European financial crisis in 2011-12, which was also around the time of US debt downgrade, as well as to the dollar and oil shots that followed the breakdown of the crude prices in 2014-2016.
"In terms of duration, the current episode is still 5-6 months short of the two episodes. But it is noteworthy that the current episode has occurred in a context of significantly stronger US macro and earnings growth and lower unemployment," Chadha says.
The previous returns are already equal to 12 years in the US bilateral trade deficit with China, he also noted.
"While we are subscribing to the consensus vision that US trade deficits reflect macro and not micro-factors, and trade policy measures are unlikely to have some impact on them, the point is that even if one did take the opposite view that the bilateral trade deficits are poor and that the trade policy will fix them, the cost of past return on equity is already worth 12 years of the bilateral trade deficit, "Chadha wrote. .