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The Tell: Why an EU slowdown poses a bigger risk to stock market than China trade

As investors have kept a laser focus on U.S.-China trade negotiations and hope that a resolution can give the global economy a much-needed shot in the arm, at least one strategist says markets may be overlooking a bigger risk: European economic contraction.

“For U.S. large cap companies, a recession in the EU is a bigger risk” than an unsuccessful resolution to the U.S.-China trade dispute, Joe Quinlan, head of CIO market strategy at Bank of America’s global wealth and investment management unit told MarketWatch. For companies in the S&P 500 index SPX, +0.09% foreign sales have contributed between 43% and 47% of total revenue, according to S&P Dow Jones Indices.

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