Wall St. has seen major stock indexes make fresh all-tine highs recently. Stocks have pulled back a bit in recent trade, however, and are lower again today. The primary reason for the lack of upside follow through could be a lack of progress in U.S./China trade negotiations. Recent headlines on trade have taken a slightly more mixed tone, while ongoing unrest in Hong Kong could also potentially upset things further
The U.S. House of Representatives on Wednesday passed two bills that may have upset Beijing.
The bills were supportive to Hong Kong protesters and those who are guarding human rights. The latest debacle between the globe’s first and second-largest economies could potentially continue for quite some time. Over a year has gone by already, with little tangible progress to show for ongoing talks. The angst surrounding trade talks had the S&P 500 as well as the Dow Jones Industrial Average set for their longest losing streak since August. The tech-heavy Nasdaq was set for its largest two-day decline in over a month.
The major stock indexes have all rallied as earnings have been largely supportive and as hopes for a “phase 1” trade deal have been on the rise. AS earnings season winds down, however, and as hopes for a trade deal fade further, equity markets may find themselves lacking any significant bullish catalysts to take prices even higher. A period of sideways to lower trade could follow, and the markets could become increasingly vulnerable to a widespread sell-off if no upside is seen for an extended period.
Adding to ongoing concerns over trade, the Trump administration is now also considering action against the EU as the auto tariff window has now closed.
An investigation into the EU could potentially clear the road ahead for non-national security import duties to be paid to the U.S. Whatever the case may be, a new trade war with the EU is not likely to assist equity markets at all, but rather could fuel a rising degree if overall risk aversion in the marketplace that could possibly benefit gold and other alternative asset classes.
As the potential for a trade spat with the EU looks increasingly possible and as hopes for a long-term U.S./China deal fade, now may be the ideal time to build a significant allocation in alternative asset classes that could potentially outperform during the next global recession. Physical gold must be at or near the top of the list for choices.
Unlike other asset classes, gold carries zero counter-party risk. It cannot default, declare bankruptcy or otherwise hose investors. The gold market not only comes with significant and unlimited upside price potential but may also provide an effective hedge against a declining dollar, lower stocks and accelerating inflationary pressures. There is simply no reason that gold should not make up a significant allocation of your portfolio.
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Don’t wait for the next major global recession to hit stock prices or for gold to take off without you before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: dow jones, hong kong, import duties, protesters, s&p 500, stock indexes, trade deal, trade war