Global Market Outlook

Geopolitical Events Could Rattle Markets

David R. Giroux, Chief Investment Officer for Equity and Multi-Asset

Executive Summary

If China is willing to make concessions to the U.S.–such as decreasing its trade surplus, buying more American goods, and increasing protections on Western intellectual property–would it satisfy the Trump administration? We’ve conducted nearly a dozen due diligence calls with Chinese experts trying to understand their perspective. Based on those discussions, Portfolio Manager David Giroux believes that China is willing to do so, and that the odds of a U.S.–China trade resolution are higher than the market perceives.

Key Highlights

  • Mr. Giroux believes that China would like to settle the trade war.
  • The question then would be, does the Trump administration believe that China would hold up its end of a deal and, if so, would that be enough to reach a resolution?
  • We believe the political and economic benefits of reaching an agreement make the odds of a resolution higher than prevailing market assumptions.

Important Information

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This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action.

The views contained herein are those of the authors as of January 2019 and are subject to change without notice; these views may differ from those of other T. Rowe Price associates.

Information contained herein is based upon sources we consider to be reliable; we do not, however, guarantee its accuracy.

Past performance is not a reliable indicator of future performance. All investments are subject to market risk, including the possible loss of principal. All charts and tables are shown for illustrative purposes only.

T. Rowe Price Investment Services, Inc., Distributor.

© 2019 T. Rowe Price. All rights reserved. T. Rowe Price, INVEST WITH CONFIDENCE, and the Bighorn Sheep design are, collectively and/or apart, trademarks of T. Rowe Price Group, Inc.

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