Casualties of the Trade War

Brian Smedley, head of the Macroeconomic and Investment Research Group, shares insights on the impact trade policy has on U.S. and global economic growth potential.

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October 18, 2019

 

 

Key Takeaways:

  • Trade war uncertainty has significant implications for the U.S. economy, not least because tariffs increase prices for consumers.
  • Trade war escalation has resulted in U.S. dollar appreciation, which tends to have a deflationary effect that can partially offset consumer price increases.
  • Trade war developments affect markets differently, but is generally negative for stocks, commodities, and corporate bonds, and positive for Treasurys.
  • The Fed is likely to try to combat any slowdown in the U.S. economy as a result of the trade war with more easing.
  • Coupled with the uncertainty likely to result in the 2020 election cycle, we believe investors should focus on capital preservation.


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Important Notices and Disclosures

The views and strategies described herein may not be suitable for all investors. Past performance does not guarantee future returns. The value of any investment may rise or fall over time. Investing involves risk, including the loss of principal. The content of this video is for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy, or investment product. The material should not be considered research nor is it intended to provide a sufficient basis on which to make an investment decision. Any opinions contained herein are not necessarily those of Guggenheim Partners, LLC or its subsidiaries and are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and nonproprietary research and other sources. This material has been provided by Guggenheim Investments which represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Funds Distributors, LLC, Transparent Value Advisors, LLC, GS GAMMA Advisors, LLC, Guggenheim Partners Europe Limited and Guggenheim Partners India Management.

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