Trade tensions won't lead to US recession: Doug Flynn

Channel: Fox Business
Published: 05/21/2019 12:34 PM

Flynn Zito Capital Management's Doug Flynn on concerns over the potential impact of U.S. trade tensions with China on the markets and economy. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and Wall Street.

Smuggler'S stanley, out with a warning on the us-china trade war, an analyst at the brokerage warning quote if talks stole no deal is agreed upon in the u. s. imposes 25 % tariffs on the remaining 300 billion dollars of imports from china. We see the global economy heading towards recession, doug flynn, certified financial planner and co-founder of flimsy tohu capital management joins us now great ...
to see you phil. Ok, so we have a prediction of a global recession. If nothing gets done. If we continue to be stalled with china in this trade dispute, what are your thoughts on that phil? Are we headed to recession in that scenario, maybe globally there talking in the us definitely noti mean this is probably a 0. 6 percent hit to our gdp. At this point, even if all the tariffs are on all 300 remaining billion dollars, that's it that's it and so 0. 6 is not going to send the u. s. into a recession.

Now it may turn parts of the different parts of the world into a negative, but the definition of recession is is two negative quarters of gdp, and that is not happening in the us any time soon and this isn't going affected either well, doug. I'M sorry, i think i called you fail, that's okay! I will get it right and i apologize for that alert so, but, but certainly if the longer this dragson, the more companies are being holding back on capital expenditures on on really planning for the future. I feel like a lot of these companies. Naturally, i'm not going to do anything until this thing gets resolved, so surely the impact would be greater than 0. 6 percent. Well, look. It'S we're talking about a hundred billion dollars of cost to a 14 trillion dollar economy. That is also not enough to change the entire picture. The united states are certain parts of the economy going to be impacted, absolutely supply chains going to be impacted. People gon na have to make decisions, but a lot of these people made decisions to stay with china when, for years and years, theywere better and cheaper options to move to whether it be vietnam or india or other places, and that can still happen. So you know china has to be careful here. While this is certainly important and it's you know, china represents less than 1 percent of our exports - we're almost 5 percent of their exports, so they have more to lose than we do and there are certain companies that are absolutely going get hit here, yeah, but in The big picture: it's not enough to change the dynamic us economy that we have going on.

That'S going to continue and from an investor point of view, how do you play this? It seems like with every different differingheadline marcus can take a big leg down or they can come back again. I mean. Obviously the volatility is up and i know that can provide opportunities within itself. But how do you play this yeah? So i think people are looking at the china, china as the reason or the tariffs as the reason right now, the markets a little volatile, but in reality, when you just spring back 20 % up after being down 20 % at the end of last year. A little fall back to 5 or 10 % is not an unreasonable expectation. In fact, on average we have 3 to 4 or 5 % drops in a year. We haven't even had one yet, so i wouldn'teven be convinced that coming down 5 to 10 percent is attributable to this. You have to take the long view here and that's what trump is taking is the long view and in the end, do you end up better off and i think we do and that's the problem you have to just work through it in the short run. That'S that's a tough part. You aren't used to that. It'S exactly right. We just have to get to the finish line, doug flynn.

Thank you so much. Thank you.

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