The markets have given up trying to make sense out of the direction of the trade war between China and the US is taking. Economist Arthur Kroeber sees three possible scenario’s for the conflict but is hesitant to pick one, he says in Barron’s.
Gavekal Research’s Arthur Kroeber notes that there are three possible outcomes. First, the two sides could sit down and get a deal hashed out in a matter of weeks. Second, negotiations could take months and only reach a conclusion after the U.S. and China decide they can’t take anymore pain to their economies or markets. Finally, the trade war could become the status quo. “While the first outcome is the most likely and the third the least, the probability of each individual outcome is less than 50%,” Kroeber writes. “Therefore our only certainty now is continued uncertainty.”
And the market reflects that.
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