After months of repeated escalation, the United States and China look no closer to hammering out a meaningful trade deal. But for now, at least, tensions look to be easing, not escalating. For investors, that provides an opening.
Gold prices have also dipped in the past week, and US Treasury yields have been rising as investors sell bonds. The yield on the benchmark 10-year note is up to 1.72%, from 1.46% earlier this month.
But a rally in riskier assets on positive, or even neutral, trade news may prove short-lived. We’ve seen this pattern before.
Remember: The next round of US tariff hikes is scheduled for October 1, when duties on $250 billion in Chinese goods that are already being taxed will rise to 30% from 25%.
And business sentiment isn’t likely to improve so quickly. Only 13% of business owners indicate that they would increase hiring if the current round of trade tensions drags on for another six months, according to a recent survey conducted by UBS. Nearly 70% believe the trade conflict has had a negative impact…