The Stock Market as an Indikator of Losers and Beneficiaries of the US and Chinese Trade War

The trade war between the United States and the Republic of China is considered in the work as a factor influencing a wide range of economic processes, including investor activity on the financial market, motivated by political decisions. The object of the research is the asset portfolios of the two countries, which are analyzed through the ETF. Subject of research - the direction and extent of the impact of trade wars of states on the state of the stock markets of countries participating in the confrontation. The aim of the study is to analyze the nature of the impact of the trade war initiated by the United States on the behavior of ETFs on the assets of the two markets using the Event Study methodology, namely how "Trade War" affected the Abnormal Returns ETF, where the abnormal ETFi yield and event dates are defined as the difference between realized income and expected income in the absence of an event. The study took stock prices for ten ETFs from the beginning of 2018 to the end of 2018. In calculating the anomalous return, the CAPM model was used as an estimate of the expected return. As a result of studying the impact of ads on abnormal returns, the author made the following conclusions: First, negative events usually cause a stronger reaction. Secondly, the reaction to events begins several days before the event, which indicates the presence of a certain insider information. Thirdly, the main negative effect of the “trade war” on investor behavior, as it seems, will eventually be transferred to the PRC stock market. China uses a different export-led mercantilist regime from the United States. Accordingly, for China, the risks of slowing growth in exports to the main market (US) and lower corporate profits will be more damaging to the activity of private investors. Moreover, it can be assumed that the deterioration of China's investment attractiveness in the global capital market will allow the United States to increase its attractiveness, which will only increase the differences in the signals received from the US and Chinese stock markets from the intensification / weakening of the “trade war”.