The new coronavirus is likely to prove considerably less deadly overall than the common seasonal flu. Despite this, the precautionary measures taken to fight such outbreaks - such as travel bans and quarantines - have significant short-term negative economic effects.
Citi analysts believe the S&P 500 EPS may have bottomed in Q3 2019 and profit growth could accelerate into 2020 as a strong US consumer and recovering global demand drive a pickup in industrial production.
The US-China Phase 1 deal represents a milestone as it grants a de-escalation of trade tensions, and reaches some commitments on intellectual property and technology issues. It should provide some reprieve to the global economy as some uncertainty is lifted.
Traditional financial services providers are being challenged by financial technology (“fintech”) disruptors. Citi analysts see fintech disruption as an unstoppable trend worth keeping an eye on.
US and China are reportedly finalizing a series of long-running corporate deals ahead of the signing ceremony of the first phase of the trade deal this week. President Trump has indicated he would like to start second phase negotiations right away, but these may not finish until the US elections.
China – Economic Transformation Brings Opportunities
By Celestee Tan
Five areas related to China’s new economy could grow rapidly as a result of economic transformation, and hence Citi analysts overweight Internet, Healthcare, Consumer, and Communication (for 5G).
