24th July 2018
A muted global market reaction so far?
With no further escalation, the implications for New Zealand from the current US-China tariff war are likely to be limited. Any escalation, however, will have a significant impact on global growth, company earnings, the stock market and the general appetite for risk. Already, some sectors may be more impacted via supply chain disruption, competitive pricing changes and the economic spill-over effects of higher tariffs on global growth, inflation and interest rates. In escalation scenarios, the impact is more negative for equity markets generally.
- Growth and inflation estimates modestly affected
- Escalation and a full trade war not priced into equity markets
- New Zealand relatively less impacted
- Best sectors likely to be healthcare, financials and property