Had President Donald Trump not initiated a trade war with China, the S&P 500 would look much different today, according to Renaissance Macro Research.
How different? Bloomberg News reported that the firm says the S&P 500 could have been 11 percent higher than where it is today if it were not for Trump’s protectionist trade policies.
RenMac’s model that tracks “day-to-day market impact from macro factors such as economic data, the Federal Reserve and Washington politics” shows that positive trade develops over Trump’s tenure have not surpassed all of the trade-related losses.
Since the beginning of 2018, trade issues have cost 300 points, or 11 percent of lost market value.
Neil Dutta, head of economics at RenMac, said on Wednesday that the market is “still not back to neutral on the trade issue.”
If the U.S. negotiates a successful deal with China, the S&P 500 could rise as much 10 percent, predicts Bank of America’s head of U.S. equity strategy, Savita Subramanian.
Markets could see new movement if the early March deadline imposed by Trump arrives without a deal, in which case the president has threatened a new round of tariffs.