Trade wars

Good news for investors: Donald Trump needs a China trade deal as badly as they do

Pity the poor investor trying to lay down credible investment bets for 2019. Global markets stopped making sense in the melee following the
2008 crash but at least investors had one defining mantra: stay long, central banks can’t be wrong. The glut of
cheap central bank money pumped so generously into world financial markets more than compensated for the credit crunch, global recession and European crisis. Ten years on, markets now face new challenges from a global recovery losing steam amid increasing event risk: the dilemma is whether investors should hold or fold.
Stock market sentiment might have lost its mojo, but there is no sense of investors rushing for the exits just yet. The era of cheap money is not going into sharp reverse, especially when the US Federal Reserve is
toning down its language on higher interest rates and the European Central Bank is putting tightening plans on ice. While low and near-zero interest rates persist, it still pays for investors to stay long and bullish on risk-taking in general. For leveraged, fast-money investors, it is still a golden opportunity for carry trades, spread bets and convergence plays.