On analysis of the movements of S&P 500 Futures, in different time frames, I find that despite the prevalence of bullish sentiments in global equity markets amid growing hopes over the an early end of damaging war between the two major economies of the world; growing skepticism can still be felt due to the fact that the U.S. President Donald Trump still looks to be very particular about the final venue for signing a final deal only in U.S.; as he said on Friday evening that negotiations about a "phase one" agreement were going well and he hoped to sign the deal with Chinese President Xi Jinping at a U.S. location when work on the agreement was completed.
It is still not clear whether China would agree to sign the trade deal in the U.S., which enhances the quantum of skepticism over the final or partial deal on Sino-U.S. tariff trade front. No doubt that the long lasting efforts to de-escalate this tariff trade tussle since a long time have only proved futile attempts; which have enhanced only nervousness among the investors who still feel it would be a big surprise if the U.S. and China finally achieve success in ending this damaging war. No doubt that this type of growing passive feelings will not turn the investors to become bullish all of a sudden with any partial deal between the U.S. and China.
No doubt that this 15-month-long tariff trade war has already caused a lot of damage all over the world, which will take a long time to resume normalcy; which enhances the skepticism over the receding recession even after the final deal. I find that the prevalence of global economic slowdown has become a deeply rooted phenomenon in most of the economies of the world; which continue to hurt not only to global industrial output but also to the global demand too. I feel this way, even a successful deal can hardly get rid of the recessionary fear for a long time; even after the resumption of global growth.
Despite the fact that the global equity markets are witnessing 11-month highs amid growing hopes over an end of Sino-U.S. tariff trade deal, Gold Futures are still maintaining above $1500; which confirms the growing skepticism over the sustainable move of global equity markets. I find that this looks evident enough to confirm the fact that even a successful deal between the U.S. and China may hardly dodge the recessionary fear at global level; which will result in heavy sell off on every upward move in global equity markets.
Finally, I conclude that if both the partners of Sino-U.S. deal remain unsuccessful this time; global equity markets may see the next market crash in 2019.
Watch my video on next equity market crash.
https://youtu.be/MFsqVY1QhC8
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