The US-China trade war seems to be taking a severely ugly turn. A closer look at the stock market reveals that not even a single genre has been free from the devastating effects of the trade war. However, the effect is felt more severely by the banks, the Energy sector, and microchip companies.
The severe effects of the trade war can be witnessed in the case of the companies that have larger business interests with China. This includes chipmakers and other technology companies. The stocks of these companies have fallen considerably over the past few months. The effects are seen to be more aggressive whenever President Donald Trump sends a tweet or makes any sort of comment about the trade war or the relationship with China.
The same tremors are being felt in case of energy companies as well. In fact, the ongoing trade war is expected to affect the global economy at large, and this has resulted in sinking the price of the oil.
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The next in line to suffer a severe loss are the banks. The reasons for the poor performance of the financial sector has been due to the lesser profitable lending. The trade war has prompted a lot of economists and analysts to make predictions about an impending recession hitting the US if no corrective actions are taken. These concerns have now severely affected the bonds market.
Stephen Volkmann, an equity analyst at Jefferies, said, “Every time there’s a tweet, I get a call and asked, ‘How does this affect CAT?”.
Is Trump listening to the impending worries and think positively about relieving the tensions between China and the US? We don’t see any positive signs. At least for the foreseeable future.
[…] latest escalation of the ongoing trade war between the US and China has made the US stocks nosedive. The escalation in the trade war was fanned by Trump’s tweet […]