Could The Trade War Escalation Create An Attractive Entry Point For Investors?


In this regard, consider also that the Forward P/E ratio** of the S&P 500 at the close of May 3 was 17.69, while the intra-day Forward P/E of the S&P 500 on May 13 was 16.90 – just slightly above the 25-year average of 16.2 according to J.P. Morgan Asset Management as of March 31, 2019.

Recognizing the potential longer-term impact on the GDPs of both countries, we still believe that an agreement, or at least a report on positive progress towards an ultimate agreement, can be achieved during the second quarter – perhaps after the G20 meeting in Japan later in June. If so, we would expect global stock markets, specifically in the U.S. and China, to bounce back significantly from this pullback. From that point in time, the prevailing, underlying theme of “Slowing but Growing” should provide additional stock market growth potential for the remainder of 2019. If an agreement, or significant progress towards an agreement, is not reached during the second quarter, additional bouts of market volatility can be expected and diversification will become even more important when managing investment portfolios. Of course, it is important to remember that diversification does not guarantee a profit or protect against a loss in a declining market but rather is a method used to help manage investment risk.

* The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).
** The forward P/E ratio (or forward price-to-earnings ratio) divides the current share price of a company by the estimated future (“forward”) earnings per share (EPS).

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Disclosure: Hennion & Walsh Asset Management currently has allocations within its managed money program and Hennion & Walsh currently has allocations within certain SmartTrust® Unit ...

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