Bond, equity markets transmitting trade war fears: Peter Cardillo, Spartan Capital Securities

The market is focussing on the fear that this could turn into a full-blown trade war and eventually impact US and possibly global growth, Peter Cardillo, Chief Market Economist, Spartan Capital Securities, tells ET Now.

Edited excerpts:

How much fear would you assign to talks of further tariffs on China? Is this just a war of words or are trade war fears for real now? Already Harley Davidson stock cracked about 6% overnight and they are moving their production outside the US.

It could turn into a serious situation. It is quite obvious that the present administration is trying to keep its promise and is using some pretty strong tactics. While it is not imposing huge amounts of penalties but it certainly is headed in that direction. The market is focussing on the fear that this could turn into a full-blown trade war and eventually impact US and possibly global growth.


We are seeing that fear factor being flashed in the bond market and we continue to see yields that are basically moving lower when they should be moving higher. All the macro news that has come out is quite strong. We saw that with sales today where the numbers came in nearly five times more than what the market was expecting. The economy is performing, but the fear factor is being transmitted by the bond market and equities as well.