Stock investors should take note that the risks of domestic political upheaval or trade friction are far from gone away.
So say strategists at Nomura Holdings Inc. led by Hisao Matsuura. While the trade rhetoric between U.S. President Donald Trump and China calmed last week, Nomura points to America's upcoming midterm elections as a reason for worry: the Trump administration could introduce more protectionist measures to play to voters. The brokerage says it's watching Prime Minister Shinzo Abe's two-day summit with Trump in Florida starting Tuesday for signs on how this will develop. "The situation is extremely fluid," the strategists wrote in a note dated Friday. "Ahead of U.S. midterm elections to be held in November, we cannot rule out the possibility of the U.S. government rolling out further measures to protect local industry."
Nomura also pointed to falling approval ratings for Abe and his government in March, noting that political concerns could "erupt again."