Goldman Sachs created a new metric to measure how US-China tensions impact stocks, and said that there’s still money to be made from the conflict
- Goldman Sachs has created a new metric to evaluate the relationship between US and China and its impact on markets.
- The US-China “relations barometer” is not limited to an evaluation of only trade risks, but also analyses technology, capital markets, and geopolitics.
- There is “still decent risk/reward for Chinese stocks unless US-China relations substantially deteriorate from here,” Goldman strategists wrote in a research note.
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A focus on trade relations between the US and China is not the best approach to judge market risk, according to Goldman Sachs.
The investment bank formed a US-China “relations barometer” that assesses not only trade risks, but also those linked to technology, capital markets, and geopolitics.
“Focusing exclusively on bilateral trade frictions is no longer sufficient for investors to comprehend the complicated US-China dynamics and to subsequently assess risk/reward in the equity market,” strategists at the bank wrote in a research note dated July 5.
Sources of tension between the countries emerged during 2018 and 2019 when trade and technology dominated investor concerns. But the focus has shifted to more strategic issues, such …continued .
[Source: Business Insider]