International reaction to U.S.-China trade talks leave markets stirred but not shaken.
Reactions to statements by President Trump regarding the ongoing trade talks between the United States and China have caused movement across several financial markets in recent days. President Trump has indicated a possible increase to existing tariffs on $200 billion in Chinese goods.1,2
Markets rallied on news that Chinese negotiators still intended to meet in the U.S. for further talks; though, they may not have been as close to finalizing a deal as anticipated. Markets in the U.S., China, and Europe reacted to the news, with American markets seeing recovery within hours.1,2
On May 6, the Trump administration indicated that it may increase tariffs on Chinese goods.3
As interesting as this type of news can be to follow, it’s important to take a long-range view. In this case, the fast drop and quick recovery of the markets serve to illustrate that cooler heads can prevail during market volatility. An investment strategy that balances risk tolerance, time horizon, and one’s personal financial goals can often be more resistant to turbulence.
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Citations.
1 – bloomberg.com/news/articles/2019-05-05/yuan-sinks-with-u-s-index-futures-on-tariff-risk-markets-wrap [5/6/2019]
2 – cnbc.com/2019/05/06/europe-stock-market-sharp-losses-as-us-china-trade-tensions-escalate.html [5/6/2019]
3 – bloomberg.com/news/articles/2019-05-06/u-s-says-it-will-raise-tariffs-after-china-reneges-on-promises-jvcunuec [5/6/2019]
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