"It Would Be A Huge Shock To The Market" - What Happens If The Dec. 15 Tariffs Kick In

Kerry Craig, global market strategist at JPMorgan Asset Management

  • "A key concern is markets have already priced in the prospect of a trade deal that has yet to be signed" Craig said on Bloomberg TV.
  • "There had been a lot of optimism built in around a trade deal and it’s still the thing that will weigh on markets over the coming months. In the meantime we need to see more of a pick-up in the global economy to really offset some of those uncertainties."

Eli Lee, head of investment strategy at Bank of Singapore

  • "I’d fade the correction today," Lee told Bloomberg TV. The renewed tariff pressures on South America and Europe are likely an effort to bolster Trump’s “tariff man” image ahead of a trade deal with China.
  • “With the economy in a very delicate situation, if this came on, it would seriously ratchet up the risk of a recession -- and the White House wouldn’t want this situation going into the 2020 presidential election next year,” Lee said.

Chris Weston, head of research at Pepperstone Group

  • "We could face a wild day," Weston said in a note to clients. The S&P 500 is likely to fall about 2%, with currencies including the yuan, Australian dollar and Korean won also likely to move, he said.
  • A relief rally may be in the offing afterward, particularly if there’s agreement to revisit talks in 2020.

Christopher Smart, chief global strategist at Barings Investment Institute

  • “Even if there is a trade deal, it doesn’t solve most of the issues that we still have with China,” which is something that markets are going to have to reflect in time, Smart said on Bloomberg TV. "In fact, it probably makes the relationship more difficult to manage, because we’ve taken tariffs off the table."
  • Smart said “time is running out” to get a deal done this year, given the logistics involved in setting up a presidential meeting. What does offer solace is that global central banks have eased policy and injected liquidity, postponing the recession that investors had been worrying about.
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