Of all the big issues that will influence stock prices in 2020, few are as big as the U.S./China trade war.
News of the tit-for-tat skirmish has sent the stock market diving and soaring for more than a year as investors try to figure out the potential impact on the market.
But here’s the thing. The trade situation is actually creating the potential for a huge move in the stock market in 2020.
As I’ve said all along, there’s just no way President Trump won’t try resolve the issue as best he can before the 2020 election.
Before I tell you what I’m seeing for the year ahead, and how to play it to your advantage, I want to give you a brief look at how we got here.
The U.S.-China Trade Dispute
The trade war likely has its most recent origins in the decision by the World Trade Organization (WTO) to allow China into its club of nations that regularly conduct trade with one another. The WTO made China an official member on December 11, 2001, based on concessions that it reduce its tariffs and open its market to world trade.
Over the years, businesses in the United States and elsewhere have complained about unfair Chinese trading practices, including the theft of intellectual property and the forced transfer of American technology to China for companies doing business in the country. Meanwhile, Chinese officials have accused the United States of seeking to slow China’s economic growth.
Long before he became president, Trump advocated for reducing America’s trade deficit with China and other nations by imposing tariffs on imported goods.
By July 2018, the Trump administration had begun to follow through with its threat to impose $34 billion worth of tariffs on Chinese products being sold in the United States, kicking off the trade war. China retaliated with tariffs of a similar value on American goods sold in that country.
The next month, the U.S. imposed a 25% tariff on 279 Chinese goods worth $16 billion. China quickly responded with a 25% tariff on $16 billion worth of American imports.
In September 2018, the U.S. imposed a 10% tariff on $200 billion worth of Chinese goods, and promised more if China retaliated. It did retaliate, with 10% tariffs on $60 billion worth of U.S. goods. Toward the end of 2018, the two nations began discussions to resolve the trade tensions.
The situation eased for a while, but flared back into the spotlight in May of this year when the Trump Administration raised its 10% tariff on $200 billion in Chinese goods to 25%. China responded in June with a 25% tariff on $60 billion worth of U.S. goods.
And on and on.
China has since ordered its state-owned companies to stop buying $20 billion in annual agricultural purchases from the U.S. while America declared China a currency manipulator.
More tariffs were ordered on both sides.
Last month, President Trump said the two countries had come to an agreement – a “first phase” of a deal to end the tensions. China later confirmed his description.
December 15 is the latest deadline in the trade war. On that day, the U.S. is set to impose a 15% tariff on roughly $160 billion in Chinese goods shipped here.
It’s also the date by which terms of the first phase could be established between the two nations… and send the market into an end-of-year frenzy.
Just this week, President Trump injected uncertainty with his comment that he may wait until after the election to settle the dispute. But I still believe he’ll try to settle things before the 2020 vote.
What’s Ahead in 2020
Although the specter of the trade war has loomed over the market in 2019, stocks managed to break out to all-time highs in October and November, when the S&P 500 and Nasdaq Composite indexes soared following better-than-expected U.S. jobs figures.
The talking heads, as usual, are predicting doom and gloom, but I’ve done a whole lot better charting my own course.
You can, too, and I’m laying it all out for you in the Early Warning Summit 2020. I’ll explain what moves I think are ahead in the trade war and how it will affect the market.
P.S. My colleague, Louis Navellier, and I are about to alert folks to a major market move we see headed our way in 2020. A move that will have profound implications for your retirement in the coming year and beyond.
For those of you who don’t know him, Louis is one of the pioneering founders of quantitative analysis, the practice of using predictive algorithms to forecast major moves in stocks and in the broader markets.
Using this approach, Louis picked the #1 performing stocks in the S&P in 2014, 2016 and 2017. His expertise has led pension funds and private investors to entrust him with up to $4.5 BILLION in assets. And for good reason. His management firm, Navellier & Associates, has turned every $1 invested into as much as $41, a remarkable 4,000% return.
Well, Louis and I are getting together on December 10 to uncover how the trade war, among other major trends, is going to affect the market and your profits in 2020. We’re calling it the Early Warning Summit 2020.
What Louis and I are preparing to share impacts far more than just stocks.
It impacts the entire economy, your job, your financial well-being and so much more.
You really don’t want to miss out on this.
It’s free to attend the Early Warning Summit 2020. Just click here now to reserve your spot and you’re all set.
Matt McCall’s MoneyLine Podcast
Click here to listen to Matt McCall’s MoneyLine podcast! This week, Matt introduces his hypergrowth investing strategy and six of the top trends he’s looking at as we enter the Roaring 2020s. From Big Data to artificial intelligence to the future of healthcare, each trend is broken down and lots of individual stocks are highlighted.
You can subscribe to this podcast on iTunes, Stitcher, Spotify, or wherever you listen to podcasts.
Learn where Matt McCall sees
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