Stocks should rally if the U.S. and China agree to new negotiations and a ceasefire in the trade war, but the economic impact of tariffs will continue.Market Insiderread more
Democrats want Mueller's testimony on his probe into Russian interference in the 2016 election and Trump's efforts to influence it.Politicsread more
The trade war between Beijing and Washington appears to have depressed Chinese property purchases in the United States. China's own actions may also be playing a role.Real Estateread more
More than 300 companies are talking to government officials in Washington about how detrimental the trade war is.Marketsread more
Powell stresses the central bank's independence in a speech that comes amid continuous pressure from the White House to cut interest rates.The Fedread more
The Senate is expected to pass its own version of the border aid legislation, while the Trump administration has threatened to veto both bills.Politicsread more
Markets in Asia fell on Wednesday morning after U.S. Federal Reserve Chairman Jerome Powell tempered expectations for a potential interest rate cut.Asia Marketsread more
In a text message, Grisham confirmed to CNBC that she will still be working for the first lady even as she takes on her new roles.Politicsread more
Acting Customs and Border Protection Commissioner John Sanders is resigning amid the furor over the Trump administration's treatment of migrant children.Politicsread more
NBC is taking the office back from Netflix as it seeks to bolster its own streaming service launching in 2020.Technologyread more
Wayfair employees plan to walk out tomorrow, after no action was taken in response to their opposition to the company supplying border detention camps with beds for children.Retailread more
President Donald Trump's continued push to level the global playing field when it comes to trade has done little to disturb the relentless bull market in stocks.
But nothing lasts forever, and at some points investors will have to react if the tensions continue to escalate. By all indications, an acid test could come as early as week, with the administration poised to impose a range of new tariffs on $200 billion worth of Chinese goods.
Running a series of different scenarios in the U.S.-China conflict, experts at FactSet have come up with a worst-case trade war scenario, one in which most major economies would take a hit and the U.S., along with a few others, would see a bear market emerge.
"In the case of the escalating trade tensions between the U.S. and China, while financial markets still appear to be discounting the global impact of a trade war, our analysis shows that if/when the market does react, the effects will be widespread," Ian Hissey, vice president in FactSet's portfolio analytics group, said in a report last week.
Hissey modeled three scenarios: a base case where the dispute continues along its current path and tensions and tariffs gradually escalate; an optimistic result where the U.S. and China reach broad agreements on the future but the newly imposed tariffs remain, and a "conservative" case that involves "rapidly deteriorating" relations and a more profound impact.
In determining impact, Hissey used the market's Brexit reaction, following the 2016 vote that allowed the UK to leave the European Union, as a template.
He came up with results that showed stocks globally dropping between 8 percent and 17 percent, with markets in the U.S., Canada and Israel faring worst and Japan being the only overall winner. Hissey did not provide a time frame for how long the market move would take.
In the event of the trade war continuing, investors fleeing from stocks would be looking for safe havens like bonds.
That also results in disparate returns, according to the analysis, with Japan again being the big winner but other countries emerging seeing impacts both positive and negative. The results in the bond market are considerably better than in stocks.
Broadly speaking, winners and losers are based on how closely they are tied with the U.S. on exchange rates. Those with a close relationship tend to lose, while those not tethered to the dollar are generally winners.
"The economic intuition seems simple," Hissey wrote. "Tariffs hurt the economies of both trading parties by creating inefficiencies and lowering future economic growth. This would have a negative impact on equity market valuations. In turn, sudden dramatic falls in equity valuations likely create a flight to quality assets."
The latest round in the tariffs is expected to take place soon, with the U.S. enacting new duties, and possible retaliation from Beijing. The U.S. trade deficit with China expanded by $36.8 billion in July and is now at $222.6 billion year to date, according to the Census Bureau.