Market Update - June 2019

FROM THE GLOBAL CIO OFFICE - By Candice Bangsund, Vice President and Portfolio Manager, Global Asset Allocation

The trade dispute between the US and China intensified in May, with heightened levels of investor angst rippling through the financial marketplace. Negotiations effectively collapsed after President Trump accused China of reneging on a deal that was taking shape and raised the tariffs on $200 billion of Chinese goods, while also going a step further and threatening to impose a 25% levy on an additional $325 billion in goods. Relations between the world’s two largest economies soured even further after Trump blacklisted US trade with Huawei, China’s second largest technology company. Not surprisingly, China pledged

retaliation and said they were “seriously considering” restrictions on the export of rare earth minerals in response. Finally at month-end, Trump doubled-down on his protectionist agenda and vowed to impose tariffs on Mexican goods in a bid to stop immigrants from illegally crossing the border in a move that has jeopardized the ratification of USMCA.