Markets were mixed on Monday.
The STOXX Europe 600 rose 0.9 perccent but the S&P 500 reversed early gains to close 0.7 percent lower. Asian stocks were mostly lower, with the Shanghai Composite in particular plunging 2.2 percent.
A report that President Donald Trump’s administration is prepared to announce tariffs on remaining Chinese imports if talks next month between Trump and Xi Jinping do not yield results renewed concerns over the US-China trade war.
Many analysts see further declines ahead.
Jesse Colombo, economic analyst and registered investment adviser at Clarity Financial, said: “Last week’s important technical breakdown is still intact.”
Stephen Auth, chief investment officer at Federated, said “it’s hard to see a sustained rally for the next few weeks”.
However, some analysts see a renewal of the stock market rally after the near-term decline.
Tony Dwyer, equity analyst at Canaccord Genuity, said that “our positive fundamental thesis...remains in place”.
However, Dwyer does not expect a V-shaped recovery, noting that with no imminent catalyst to push stocks up, “the bottoming process is going to feel awful”.
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