A “trade war” can be said as the measures and effective countermeasures on import restriction and tariffs on imports that surge over time. The trade war causes trade between the two countries to break down. When a nation seeks to provide a shield for its domestic industries and create jobs in the country, then a trade war begins. We are living in an era of the trade war.

How a trade war is affecting countries and why predictions are bullish?

The skyrocketing trade war between China and the U.S. has increased the roughness in the trading between these two counties. It has ultimately raised the bearable attitude. But several hopes still remain with some honored investment strategists. According to their prediction, in 2019, the S&P 500 Index (SPX) will rise by approximately 25% to 30%. Although on the closure on date May 23, the gain of the S&P 500 was 12.6% year-to-date.

However, the prediction with this gain seems to be smooth, but the journey can be rough. According to the calculations of Binky Chadha, who is head of the asset allocation and chief equity strategist at Deutsche Bank, the S&P 500 will be at 3,250 by the end of the year 2019, increase by 29.7% for the year. However, his calculations expect stocks to drop over the next three months before rebounding intensely. To support his prediction, he says, “I am very much of the view that things need to get worse before they can get better.”

Another bull is acknowledged as one of the most precise forecasters on Wall Street, Marko Kolanovic. He is the global head of quantitative and derivatives strategy at JPMorgan. According to his estimation, the year-end target of S&P 500 Index (SPX) will be 3,000 or a gain of 19.7% for the year 2019. He believes that a successful trade commitment can drive the S&P 500 Index (SPX) to 3,200, up by 27.7% for the year.

Recently, the Market Strategist CNBC has organized a survey, and the summary of the result of that survey is given below:

STOCK MARKET FORECASTS OF WALL STREET

(Closing Value of S&P 500 in 2019)

Most bullish: Binky Chadha (Deutsche Bank), 3,250 (+29.7% in 2019)

Average of 17 firms surveyed: 2,961 (+18.2% in 2019)

Most bearish: Two strategists at 2,750 (+9.8% in 2019)

Bears: Mike Wilson (Morgan Stanley), Maneesh Deshpande (Barclays)

S&P 500 closed at 2,822 on May 23.

Chadha does not believe that ascending corporate debt is an increased risk for the market. He says, ” [U.S.] GDP is outdated as a means for looking at [U.S.] corporate debt.” He very well knows that U.S. companies have immensely more global exposure today than in 1960. Based on the facts and calculations, he expects the next three months to be harmful to stocks before confidence is restored. Effects are; signs of slowing U.S. economic growth and the long history of the market of 2% to 5% pullbacks every few months.