“We reiterate and still recommend communication services, consumer cyclical and technology sectors during a market recovery period, but looking at market movement from the first trade war, markets were volatile and trended downward as there were several headline-driven dead cat bounces where the market finally bottomed in 2019,” they add.
As the world awaits a 90-day truce between US and Chinese leaders that would result in a more permanent resolution, Morningstar Equity Research analysts are preparing for the possibility that progress stalls and the world’s largest economies fail to strike a deal.
US President Donald Trump is already making headlines again on reimposing European Union (EU) tariffs. Should this happen with the EU or China, markets will likely crater again and will see much greater volatility given the heightened uncertainty with regard to global growth, they write in a May 30 thematic note on Chinese equities.
