Are Better Days Ahead For The U.S. Manufacturing Sector?

Video length 00:05:05

On the latest edition of Market Week in Review, Senior Portfolio Manager Megan Roach and Research Analyst Puneet Thiara discussed the initial trade deal between China and the U.S., recently released macroeconomic data and expectations for fourth-quarter earnings season.

Highlights of the China-U.S. trade deal

The official signing of the phase one trade deal between the U.S. and China took place Jan. 15, with China committing to further protections of U.S. intellectual property, as well as increased access to its financial services sector. China also pledged to purchase an additional $200 billion in U.S. goods, with an emphasis on manufacturing and agricultural products, Roach said.

“In turn, the U.S. removed China’s designation as a currency manipulator, which was a positive for markets,” she stated. What wasn’t removed, Roach noted, were most of the existing tariffs on Chinese imports. “U.S. tariffs on approximately $360 billion worth of Chinese goods will stay in place—with the expectation that these tariffs will be used as a point of leverage in the upcoming phase two negotiations,” she explained. Roach added that while these talks are likely to kick off in short order, they’re also projected to last for a lengthy period of time—perhaps not concluding until after the November presidential election.

All in all, the signing of the initial deal marks a favorable milestone between the world’s two largest economies, Roach said, although the agreement was met with slight disappointment by some. “The lack of detail in the deal, particularly on the agricultural side as it relates to soybeans, fell shy of what some were expecting,” she noted. Roach explained that some individuals were hoping that China would commit to a specific amount of U.S. soybean purchases, rather than basing these purchases on the level of demand.

Regional Fed surveys provide dose of optimism for U.S. manufacturing

1 2
View single page >> |

Disclosures

These views are subject to change at any time based upon market or other conditions and are current as of the date at the top of the page.

Investing involves risk and ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.
Comments have been disabled on this post.