The past two years of stock-market trading can be easily sectioned into two phases: the tax reform bump, and the trade-war turmoil that derailed it.
Marko Kolanovic, JPMorgan’s global head of quantitative and derivatives strategy, explains why a “Trump recession” is entirely possible.
He also lays out a compelling bull-case scenario that could see stocks recover sharply as the economy avoids a full-blown meltdown.
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The way Marko Kolanovic sees it, the past two years of stock-market trading have been divided into two distinct stages: the period coinciding with President Donald Trump’s massive tax cuts, and the far less rosy span since then — one that’s been marred by trade-war fears.
The first phase was a glorious time to be a bull. Stock prices surged to new records and US manufacturing data vaulted higher.
Then Trump’s Twitter fingers derailed the whole enterprise — and then some.
For one, stocks absorbed some steep and sudden losses. Yes, they’ve recovered admirably amid intermittent signs of trade progress, but uncertainty has also crept into the minds of investors.
And then there’s the matter of manufacturing. As you can see in the chart below, it reversed …read more
Source:: Businessinsider – Finance