The investment world will not come to an end because the world’s two leading economies can’t reach a trade agreement. So your clients should continue to have a generous equities component, especially foreign equities, a market strategist said Monday.

Those were some of the predictions of Jeff Schulze, a strategist with Clearbridge Investments, whose analysis goes out over the next 12 months.

He said that there will be no recession this year and through the first half of 2020. The U.S. economy will grow this year by about 2.5 percent even if the U.S. and China trade war continues.

Schulze’s analysis, which came at a Legg Mason conference in Manhattan, is that the economy is primed to continue its expansion because fundamentals are good. And the trade war, he added, will likely come to an end soon, he added.

“I just think that both parties will come to a rational conclusion that this will make sense for everybody,” Schulze said.

Schulze was not surprised that President Trump had fired a shot in the trade war. He has already ordered a first round of tariffs on Chinese goods, with a second round now slated go into effect in another week.

Retaliatory actions by the Chinese would be felt mostly by American consumers, but it is not clear if that would lead to a crisis of confidence that ultimately would cause employers to slow hiring, Schulze said.

However, even if the trade war continues, it could slow growth, but not stop it. “Even in the worst-case scenario, in which more tariffs have been imposed, I don’t see a recession on the horizon,” according to Schulze. And he added a reason for that is economic indices remain strong.

The U.S. economy, he said, is primarily fueled by the consumer economy and, on average, the consumer is doing well.

Schulze said these good numbers include a strong U.S. labor market and consumer balance sheet.

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