Strategist: Sino-American Trade War Is Market's 'Most Difficult Headwind'

President Donald Trump and his Chinese counterpart Xi Jinping are set to meet later this month in Argentina, but investors hoping for a swift resolution to the trade dispute may want to reconsider, according to Nobel Prize winner Michael Spence.

Talks Will Continue 'For Some Time'

Spence, a co-recipient of the 2001 Nobel Memorial Prize in Economic Sciences, told CNBC in a Monday interview that the trade dispute between U.S. and China will continue "for some time."

China was expected to modify its governance and economic systems about 15 years ago to better position itself to deal with trade disputes, Spence said. 

"[But] it's pretty clear that's not going to happen, so what we have is a much more complicated challenge, working out mutually beneficial arrangements between very different systems." 

Analyst: China The 'Most Difficult Headwind'

Bull analyst Art Hogan of B. Riley FBR separately told CNBC in a "Trading Nation" segment that China is the "most difficult headwind" for the market. Without any "clear and concise" developments on the Sino-American trade front, the markets could experience another test to the downside, Hogan said. 

Those who were expecting a trade deal with China to be finalized ahead of Tuesday's midterm elections are likely to be disappointed, he said. But any "whiff of constructive news" should be sufficient to help jolt the market forward, as a trade deal is likely to be reached eventually, Hogan said. 

B. Riley FBR's chief market strategist said he expects the S&P 500 index to move higher by 10 percent from its current level to end the year at the 3,000 level, trading at 3,300 by the end of 2019. This outlook is based on expectations for a resolution with China, and in the absence of any final deal, Hogan said his 2018 and 2019 year end targets would need to be lowered. 

Related Links:

What China's Proposed 50% Cut To Car Purchase Tax Could Mean For Automakers

Pro: Why Retail Investors Should Worry More About Wages Than Tariffs