Report Detail Summary

The Trade War and Corona Virus Effects

February 17, 2020

Given that the tariffs are still in place, that Phase I of the trade deal only hit a pause on the trade war, it is safe to say that the trade war is not over. Add to this the equivalence we made regarding the impact of the Corona Virus on the exchange rate, i.e. the flight to quality and it is easy to conclude that these events have elevated the foreign exchange value of the dollar. The appreciation should reverse once the virus is controlled and a trade armistice is signed. Our analysis yields some interesting investment implications when the dollar appreciation reverses. . First, since the cessation of hostilities and a solution to the Corona Virus will be bullish developments, we expect the global markets to react positively to any or both of these developments. We also expect the rise above the PPP relationship to subside and return to its long run PPP with perhaps a temporary overshooting of the long run decline. , hence we look for the US dollar to decline, the relative performance of the bourses to reverse and the small cap to bounce back. The weaker dollar should favor tradable and commodities. .

You must have an active account to view these reports. You may register for a trial here

Download Complete Report in PDF Format

Download Complete Report in Word Format

Copyright © 2018 La Jolla Economics All Rights Reserved
Legal Disclaimer - Privacy Policy - Contact Information - Login



The ValueTiming™ strategy is based on the assumption that politicians and policymakers have particular views of the world, and that they will in general adopt policy measures that are consistent with these views.


Economic Disturbances and Equilibrium in an Integrated Global Economy

Cocktail Economics: Discovering Investment Truths from Everyday Conversations

Understanding Asset Allocation: An Intuitive Approach to Maximizing Your Portfolio