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We are heading towards higher earnings and global growth in 2020: Peter Cardillo, Spartan Capital

There’s US-China trade deal, Brexit , Lagarde cutting rates. A lot of good can happen in new year.

ET Now|
Updated: Dec 13, 2019, 10.02 AM IST
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ETMarkets.com
Peter Cardillo, Spartan Capital Securities-1200
Agreeing on US-China trade deal is a good start for coming to a final solution, not immediately, but down the road. It is a step forward and it is going to help the global economy, says Peter Cardillo, Chief Market Economist, Spartan Capital Securities. Excerpts from an interview with ETNOW.

What are your thoughts on the tweet from Donald Trump with respect to signing off on a deal to pause the US-China trade war? He said “they wanted and so do we”. We have seen previous truces collapse without a formal announcement or a written agreement. Are you a bit wary or do you think there is certainty on this front?
They do have an agreement in principle and we just have to get the final touch from the White House saying that he is going to sign the deal and the market certainly will react in a positive way. This is really a good start for coming to a final solution, certainly not immediately, but down the road. It is a step forward and it is going to help the global economy.

The details that came out yesterday shows they are putting on the sidelines the tariffs that were to go into effect on December 15. That is the key right there. So, it is something of a cosmetic deal but it is a deal that the market is going to welcome. That will prevent the global economy from slipping further.

You can perhaps see Europe pick up a bit, the emerging economies pick up and certainly China probably can begin to stabilise. That is a fairly good outlook.

Trade deal is in sight. What next? Markets always need something to latch on to. What could be the next big thing which will keep US markets afloat?
I agree with that because the markets have been rallying on the prospects of first deal conclusion and now we are going to get that. The next big thing is what is happening in England. It looks as though the Conservatives are going to win and so there might be a ray of hope for Brexit. That certainly would be another relief in sight.

Going forward, we will be looking at earnings and global growth as well. In fact, another thing that happens yesterday was the fact that Christine Lagarde gave a very good assessment of what may or may not happen with interest rates in Europe. She got off to a good start. There are a lot of good things that could happen moving into the new year. We are probably going to see stock prices going up higher, although it is not going to be as lofty as we saw in 2019.

UK elections are getting pretty exciting. It looks like Boris Johnson is poised to win.
As I said before, it does look like the Conservatives are going to gain seats and that will strengthen their hands in Parliament. It should lead to some sort of exit from Europe in a positive way and not in a disorderly way which would obviously have a negative impact not only in Great Britain but in Europe as well.

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