قالب وردپرس درنا توس
Home / Business / Why investors can give Trump a 20% share price

Why investors can give Trump a 20% share price



<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "President Donald Trump's ever-increasing & nbsp; Twitter diplomacy on the Chinese trade war front & nbsp; may erode confidence in the market outlook so that the December 2018 brutal stock market crash may be in play again before the turn of the year. "Data-reactid =" 1
5 "> President Donald Trump's ever-increasing Twitter diplomacy on the trade war front in China may be eroding confidence in the market outlook, so the brutal December 2018 stock slumps may be in play again by the end of the year.

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" Absolutely [president’s Trump’s tweets on trade are eroding market confidence]"Diamond Hill Capital Management Strategist John McClain Said About Yahoo Finance & nbsp; The First Trade . McClain believes there is a growing risk of a US recession in early 2020, calling weakening macroeconomic data over the entire globe as an important driver of an escalating trade war – seen on Friday with the US and China hitting each other at new tariffs – therefore raises only the possibility of a deep market correction. "data-reactid =" 16 ">" Absolutely [president’s Trump’s tweets on trade are eroding market confidence]"said Diamond Hill Capital Management strategist John McClain at Yahoo Finance & # 39; s The First Trade. McClain believes there is a growing risk of a US recession in early 2020, calling out weakening macroeconomic data across the globe as an important driver. The specter of an escalating trade war – as seen on Friday with the US and China beating each other at healthy tariffs – therefore raises only the possibility of deep market correction.

McClain believes that correction – which would be needed to adjust valuations to slow global growth and the Federal Reserve's inability to immediately begin growth – could bring investors back to the low December 24, 2018.

< p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8 em) – sm" type = "text" content = "For context, the December 24 low for Dow Jones The Industrial Average ( ^ DJI ) and the S&P 500 ( ^ GSPC ) are 16% and 18% lower from today's levels, respectively. "Data-reactid =" 18 "> For context, the December 24 low for the Dow Jones Industrial Average (^ DJI) and the S&P 500 (^ GSPC) is 16% and 18% lower from today's levels, respectively. [19659003] "It's a time not to lose money. You can see a repeat of the fourth quarter last year, say a draw from 15% to 20% [later this year] "McClain thinks.

<p class =" canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8 cm) – sm "type =" text "content =" Signs of investors losing confidence in Corporate America's earning power in the midst of the trade war are everywhere in these markets. Hedge funds and mutual funds have & nbsp; rotated out of shares & nbsp; with great exposure in China. Instead, this cash has been parked in perceived safe havens such as health care stocks and US Treasuries (see recent & nbsp; yield curve inversion ). "Data-reactid =" 20 "> Signs that investors are losing confidence in the earning power of Corporate America in the midst of the trade war is everywhere in these markets, with hedge funds and equity funds rotating out of high-exposure equities in China, instead having been parked in perceived safe havens such as health care stocks and US Treasuries (see recent inversion of the yield curve).

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – -sm Mt (0.8em) – sm" type = "text" content = "Small-cap Russell 2000 ( ^ RUT ) – often seen as the de-facto measure of the health of US-centric companies – has tipped Dow and S & amp; P 500 since mid-October 2018. Meanwhile, the Dow Jones Transportation Average ( ^ DJT ) has underperformed the broader stock standards back to early June. "data-reactid =" 21 "> Small-cap Russell 2000 (^ RUT) – often viewed as the de-facto measure of the health of US-centric companies – has been making the Dow and S&P 500 since mid-October 2018. Meanwhile, the Dow The Jones Transportation Average (^ DJT) has underperformed the broader equity standards back to early June.

What to expect in the coming months

"There are fears the trade war is going on that will now weigh even more strongly on financial markets and business investment in the coming months – and this is where the real damage to the US economy will be done, "writes chief of US capital economics Paul Ashworth.

Not everyone agrees the outlook in December 2018 is low. But the collective tone of Wall Street is that September – historically never so good for stocks – can be choppy, especially if Trump's Twitter feed remains insanely active with trade comments.

"I don't think the December recession is likely. The reason is that we had a global tightening cycle last year, and I think people are already much more secure," said SunTrust Chief Markets Strategist Keith Lerner. "Can you have a correction of 10 % to 15%? Sure, but I think we're unlikely to try and try again in December. "

<p class =" canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Brian Sozzi is the editor and co-host of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi "data-reactid =" 26 "> Brian Sozzi is the editor and co-host of The First Trade [19659035] at Yahoo Finance Follow him on Twitter @BrianSozzi

Yahoo Finance live morning show.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Read the latest financial and business news from Yahoo Finance "data-reactid =" 40 "> Read the latest financial and Yahoo Finance Business News

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Follow Yahoo Finance at Twitter Facebook Instagram [19659007] Flipboard SmartNews [19659008] LinkedIn YouTube and reddit . "data -reactid =" 46 "> Follow Yahoo Finance on Twitter Facebook [19659008] Instagram Flipboard SmartNews LinkedIn YouTube and reddit .


Source link