MTS Insights

A new Chinese economy has been a looming threat over the past few years. It has slowly drifted away towards the accelerated, variable pace of an emerging market economy to move towards a mature service based economy centered around consumption. In the World Bank's China Economic Update for December 2018. The economic data in the report shows how the change is progressing and how its reacting to the current trade dispute with the United States. The most troubling aspect of the shift is the slowing of Chinese GDP despite the gradual pace. The Chinese government already projected lower numbers for the 2019 year, but the World Bank report shows that this is no sudden adjustment. "GDP growth slowed to 6.5 year-over-year in the third quarter from 6.8 percent year-over-year in the first half of 2018 and 6.9 percent in 2017," as mentioned in the report. An interesting aspect of the slowing GDP is that the deceleration is mostly caused by lower exports. Net exports weighe...

President Trump's protectionist trade policies have been one of his more contentious economic policies garnering resistance from critics of all political leanings. The tariff dispute between the United States and China is the most well-known consequence of these policies and has resulted in economic growth worries. The U.S. stock market sat on the brink of a full-on bear market at the end of 2018 but recovered sharply in the first two months of 2019. Observers continue to monitor negotiations between top U.S and Chinese conveys that have yet to produce a decisive trade agreement. Soybean and corn farmers are two groups within those observers that are watching closely in hopes of seeing their markets improve. According to Reuters , USDA Chief Economist Robert Johansson reported that “under the trade dispute, exports to China alone have plummeted by 22 million tonnes, or over 90 percent.” The dramatic reduction in Chinese exports so far has weighed on the latest 2019 projectio...