Morgan Stanley lays out a grim forecast for the US if trade negotiations between the world’s two-largest economies turn sour.
The firm also identified the market sectors with the biggest exposure to increasing input costs, and how passing the buck onto consumers will be detrimental to demand.
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The US’ ongoing trade war with China has experienced wild twists and turns, causing shifts in market sentiment at a moment’s notice. That’s made it hard to drown out the noise in order to get to the numbers that matter most.
Morgan Stanley’s latest work has cut through the market’s nebulous hue, calculating the economic, equity-market, and earnings-growth implications of President Donald Trump’s trade war.
And the firm isn’t exactly sugar-coating its latest round of forecasts. It’s weighed recent developments in the trade war and arrived at a stark bear case that should have investors everywhere worried.
Here’s a summary at Morgan Stanley’s bear-case projections:
S&P 500 falls 16% to 2,400 over the next 6-12 months
Earnings growth bottoms out in 2021 at -14%
A full-blown economic recession hits in 2020
In broad strokes, Morgan Stanley argues that if the world’s two largest economies can’t come to a viable agreement, …read more
Source:: Businessinsider – Finance