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- A Barclays survey of more than 400 investors showed widespread fear of how President Trump’s global trade war could affect markets.
- The survey follows Trump reigniting threats of increased tariffs against Chinese goods and a possible new conflict with France over a tax against US tech companies.
- Those surveyed were in less agreement over the current economic cycle, with investors split nearly 50-50 on whether the cycle is ending or simply in a rough patch.
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A Barclays survey of more than 400 investors revealed a widespread fear of a global trade war, with nearly 60% of those surveyed calling it the biggest risk to markets over the next year.
Other risks mentioned included weaker US growth and stagnant economic development in China. The two nations are the primary members of a trade war that recently dragged on into its second year.
Trump reignited his threats against China on Tuesday after hopes of a ceasefire, announcing his willingness to place tariffs on another $325 billion worth of Chinese imports. The trade war has already imposed tariffs on more than $350 billion worth of goods between the world’s two largest economies.
"We have a long way to go as far as tariffs where China is concerned," the president said in a Cabinet meeting.
Barclays Research
Trump shows no signs of keeping his trade conflicts between just the US and China. The president targeted France on Wednesday after it proposed a 3% tax on US tech companies. Trump previously considered imposing auto tariffs on European Union members, saying they manipulate their currencies unfairly in order to compete with the US.
News of a possible trade conflict with France led major indexes to fall further from last week’s record highs, and the weakness continued into Thursday.
Barclays’ survey revealed investors were far less unified in regard to market outlook. While just over half of respondents believe the current economic cycle is approaching its end, 38% see the situation as a temporary rough spot before indexes continue to rise.
The investors surveyed do agree that a recession isn’t very far away. While 55% expect a global recession by 2020, 45% don’t expect it until 2021 or later. A indicator used by the New York Fed to predict the probability of a recession in the next 12 months recently hit 32%, its highest level since 2009.
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Source: Business Insider – feedback@businessinsider.com (Ben Winck)