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Swiss bank UBS is so concerned about the trade war that it is recommending that its clients sell shares.
UBS has cut its recommendation on equities to “underweight”, for the first time since the eurozone crisis in 2012.
The trade dispute escalated this weekend, with the US president saying the conflict was “in many ways…an emergency.” Late last week, the US and China both announced a fresh increase in tariffs on each other’s goods, including an increase to 30% from 25% on $250bn of US imports of Chinese products.
We still believe the US can avoid recession in 2020, helped by easing from the Federal Reserve and healthy consumer spending. But downside risks are increasing for both the global economy and markets. With talks between the US and China dominating market moves over the near term, investors should brace for higher volatility.
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“I have great respect for the fact that China called, they want to make a deal.
“This is the first time I’ve seen them where they really do want to make a deal, and I think that’s a very positive step.
Read more: theguardian.com