• Frank Haverkamp

China and the US

The trade war between China and the US is having a negative impact on the US economy.

Stocks are volatile, the trade index is down, and optimism has decreased. Amara Omeokwe from The WSJ wrote an article in September of 2019 describing the impact of a trade war between the two mega-economies.

One of the leading byproducts of this is the increase of the ticker VIX. The VIX index measures the expectation of stock market volatility over the next 30 days implied by S&P 500 index options. Since the turn of the year in 2019, the VIX has spiked to the highest levels since 2011. Stocks are uncertain about the future and it’s tracked here.

A second indicator is the manufacturing index. The manufacturing index is considered to be one of the most reliable economic barometers of the U.S. economy and gives an important early look at the health of the nation’s economy. It recently fell to 47.8 in September, the lowest level since June 2009, from 49.1 the prior month. Readings below 50 indicate contraction, while those above signify expansion.

It’s easy to see why optimism on the US economy is down. A trade war with another mega-economy creates uncertainty. Uncertainty creates volatility.

As of now, the market to sell businesses is still holding steady. Premiums are up and all profitable businesses are getting higher than average multiples. If you’re considering selling, now’s a great time to review your plan. Give me a call today and let’s talk about options.

Frank Haverkamp

Sunbelt Business Advisors