Euro zone bank lending continued to pick up before tariffs, ECB data shows
1. Eurozone business lending growth accelerates amid interest rate cuts. 2. Concerns rise as U.S. prepares for a global trade war.
FAQ
Why Bearish?
The prospect of a global trade war can adversely affect U.S. businesses, leading to reduced earnings across sectors in the S&P 500. Historical instances, like the tariffs initiated in 2018, showed a direct negative impact on stock prices.
How important is it?
The trade dynamics between the U.S. and other economies are crucial to S&P 500 performance, especially for large exporters. The reported lending growth may not solve underlying trade concerns, making it a significant factor influencing market sentiment.
Why Short Term?
The immediate reaction in the S&P 500 is likely to reflect market fears related to the trade war. For example, in past trade disputes, initial responses tended to show sharp declines within weeks.