“China exports 4 times more to USA than USA exports to China.
Any trade war hurts China 4 times more. This is not complicated.”
Why then are indexes like the DJIA and Russel 2000 getting hammered every time the trade rhetoric gets intense; when Washington talks tough?
Everyone from Bloomberg to CNBC to Steve Forbes says that the reason the markets are taking it on the chin (so to speak) is the trade issues. Not the Fed. Not interest rates. Not the real economy.
If the way these bilateral trade issues are being addressed is such a clear win for the USA, it would be reflected accordingly in the stock market. It clearly is not.
Unless, of course, people like Steve Forbes have it wrong.
Is there an explanation for this?
It’s even simpler than that. The total US exports to china are LESS THAN 1% of US GDP.
Stock markets: The AVERAGE gain by SP500 over 50 years is just under 8%. Since the FED began ZIRP (zero interest rate policy) during Obama admin, SPX had increased from a low of 700 to 2950 recently in 9 years. That represents 16% increase annually. But corporate earnings barely doubled in 9 years. This is UNSUSTAINABLE!!!
Markets are just looking for any excuse to drop.
Didn’t Steve Forbes sell his magazine, to the Chinese?
Just asking.