Trade tensions are already impacting the markets:
"It is a broad consensus across academia, business leaders and market practitioners that trade wars and protectionism are a lose-lose economic proposition," Kolanovic said. "Trade tensions continue to inflict damage to investor psychology and business confidence." But Kolanovic has taken matters a step further and quantified the negative impact Trump's trade bluster will have if the president maintains his current path — and the results aren't pretty. He estimates that US equities have already absorbed a 4.5% hit — give or take 1%. Applying that to current market capitalization, Kolanovic says this translates to $1.25 trillion of "value destruction" for US firms. For context, that's roughly two-thirds of the positive impact of fiscal measures. JPMorgan "A negotiation that includes bluffing/threats can be successful in a two-party negotiation setup, but is more likely to deliver self-defeating results in a complex system such as global trade," said Kolanovic.
Trump’s trade war market cost calculated by JPMorgan's Marko Kolanovic - Business Insider
First Argentina, then Turkey, Brazil next?
"Higher oil prices + rising interest rates + appreciating dollar, the trifecta that continues in markets today (albeit not in an extreme fashion), tends to test the ‘self insurance’ of several EMergingMarkets, together with their economic policy responsiveness," he said.
El-Erian Warns Brazil May Be Next Emerging-Market Domino to Fall - Bloomberg
If current conditions persist, corporations are likely this year to inject more than $2.5 trillion into what UBS strategists term "flow" — the combination of share buybacks, dividends, and mergers and acquisitions activity. The development comes as companies find themselves awash in cash, thanks primarily to years of stashing away profits plus the benefits of a $1.5 trillion tax break this year that slashed corporate rates and encouraged firms to bring back money idling overseas.