Market Update

Equity markets defied the historically negative month of October with equity indices moving higher despite ongoing trade dispute uncertainty and growing concerns of global economic headwinds.

A proposed tariff increase on goods imported from China was delayed from October 1st to October 15th. Tariffs on a number of Chinese goods are scheduled to increase to 30 percent from 25 percent effective on the 15th.

A 15% tariff was imposed on roughly 40% of consumer products imported from China effective September 1st, affecting over $100 billion worth of annual imports.

Trade tensions escalated as the U.S. announced a 10% tariff commencing September 1st on $300 billion of Chinese imports that haven’t yet been subject to any tariffs. The additional tariffs would essentially apply to nearly all imports from China. Another $250 billion in Chinese imports have already been subject to a 25% tariff for the past few months.

The ongoing trade dispute between the U.S. and China escalated in May as the U.S. signaled that it had not finalized a deal yet with China. The lack of a deal led to the U.S. announcing an increase in tariffs from 10 percent to 25 percent on $200 billion of Chinese imports.

Tranquility that fell upon markets as volatility receded in April was interrupted by a return of uncertainty surrounding trade negotiations between China and the United States.