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During 2018 and 2019, the United States and China were engaged in a trade war, with each country imposing tariffs on the other country's imports.
During 2018 and 2019, the United States and China were engaged in a trade war, with each country imposing tariffs on the other country's imports. As a result, some U.S. firms had to pay higher prices for inputs, and some experienced declining sales in China. An article in the Wall Street Journal wondered whether the decline in future profits would cause stock prices to fall further. The article quoted a stock analyst who did not believe that stock prices would decline further, arguing, "The market, I think, is saying all this bad news is already priced in." What does the analyst mean when he says that news about the trade war is already "priced in"? Part 2 A. That the government has adjusted the price that stocks can trade at, in response to the trade war with China. B. That the current stock prices do not fully reflect the bad news and arbitrage opportunities are available. C. That the current stock prices in the market already reflect the bad news on expected profits. D. That stock prices do not move in response to expectations, they only move when actual profits are known
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