Markets shrug off start of trade war but “risks skewed towards downside”

Markets had a mixed performance last week. While the S&P 500 rose 1.5 percent and the STOXX Europe 600 rose 0.6 percent, the Nikkei 225 fell 2.3 percent and the Shanghai Composite fell 3.5 percent.

All major markets did rise on Friday, shrugging off the start of the US-China trade war as the US implemented trade tariffs against China and the latter retaliated.

The S&P 500 was among the bigger gainers on Friday, rising 0.9 percent on the back of a US employment report showing an increase of 213,000 jobs in June.

Some analysts remain concerned about the trade war.

Konstantinos Anthis, head of research at ADS Securities, wrote in a note: “Whether this is a sign of complacency or a suggestion that investors have grown accustomed to this continued spat remains to be seen, but in any case caution is advised.”

Mark Cliffe, chief economist at ING, wrote: “There is limited evidence so far that protectionist measures are derailing the global economy, but growth risks are skewed towards the downside over the summer.”