TRADE WARS AND STOCK INDEX FUTURES


The conventional wisdom is that there are seldom winners in trade wars. History has shown that high tariffs and trade wars are long, costly and often difficult to end with stock markets suffering. If this is true, why have U.S. stock index futures held up so well during the current round of global trade rifts?


 One of the most important and disrupting trade wars in history was signed  Act that was sponsored by Senator Reed Smoot and Congressman Willis  the beginning of a devastating trade war.


This legislation increased import duties for agricultural and manufactured     introduced in Congress weeks before the stock market crash of October  


          


 IMPOSITION OF TRADE TARIFFS Although stock market prices began to fall in     


The adverse stock market reaction was the same, but not quite as severe soon after President Bush  


 Why have U.S. stock index futures held up so well in the face of rising global trade wars? History has shown  advanced to their highest levels since February and  new historical highs.


 index futures continue to pay less attention to the trade war threats. Could it be that U.S. stock index futures are looking past the negatives of trade war uncertainties and are focusing on something else? But what? My contention is that “what” is the bullish  environment.


AMERICA’S TRADING PARTNERS, LED BY CANADA, RETALIATED WITH TARIFFS ON UNITED STATES EXPORTS, WHICH PLUNGED 61 PERCENT FROM 1929 TO 1933.


16 | ADMISI - The Ghost In The Machine | July/August 2018


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