After an ungood Thursday, and oh my Friday, the Monday morning opening of financial markets still reeling from President Donald Trump’s tariff strategy is being closely watched.
Live feed here from Bloomberg:
From the BBC:
Stock markets across Europe and Asia plunged on Monday as fears over the global impact of US President Donald Trump’s trade tariffs deepened.
The FTSE 100 opened more than 5% lower, following its steepest fall in five years on Friday.
Germany’s Dax plummeted 10% in the first few minutes of trading, before recovering ground, after Asian markets dropped steeply overnight, with Hong Kong’s Hang Seng experiencing its fourth-biggest one-day decline ever.
US markets were also set to open lower as economists warned that a recession in the country is now looking increasingly likely.
‘Medicine’
On Thursday, Trump announced tariffs on the US’s trading partners, many of which were steeper than economists had expected.As traders digested the news, US markets experienced their worst week since the beginning of the Covid pandemic in 2020, with more than $5 trillion (£3.9tn) erased from the S&P 500.
Economists speculated that may countries would attempt to negotiate deals on the tariffs.
But on Sunday night Trump doubled down, telling reporters that “sometimes you have to take medicine to fix something”.
Economic hits
If world leaders are unable to negotiate deals with Trump, the tariffs may have a destructive effect on economies globally, analysts have warned.“Fundamentally, investors are worried about a big hit to corporate earnings and a massive slowdown in economic growth,” said Russ Mould, investment director at AJ Bell.
On Monday, economists at US banking giant Goldman Sachs predicted a 45% chance of a recession in the US if Trump does not negotiate deals on the tariffs.
That came after JP Morgan, another US bank, said it saw a 60% chance of recession in the country.
As of 1.24 pm DOW seems to be bumping along at 38k with a little excitement around a false rumor of a 90-day pause causing the market to perk upwards until rumor popped.
Wasn’t sure what to expect… personally felt that another 5% drop would’ve signaled a lot more pain to come. There’s still time…
But I’m also not sure what to make of a 15% overall drop with a floor of 38k. (If that’s the case).
My own sense was that we wouldn’t know how to interpret things until this coming Friday – or the first set of financial institution failures. But, if it’s just a ‘correction’ with a slow moving recession…?Report
The Japanese have reportedly dumped $5 trillion in US treasuries. So there’s that.Report
To whom did they sell them?Report
That I don’t knowReport
Double clicking into this… I’m not sure what you’re seeing reported is true? Seems Japan holds about $1T total and in Feb reduced it’s holdings by (variously reported) $50B – $200B – because yields were increasing.Report
That would be a fine feat considering they don’t own anywhere near 5 trillion in US treasuries.Report
Also curious to see that Gold is dropping too — although, it had already reached $3.2k from $2k over the past year — so people riding the wave?
Bitcoin is also down… I mean, if you can’t flee to safety in imaginary currents of electric, where *can* you flee to safety?Report
p.s. for Site admins… I’m getting an error with every post (thought post completes): Warning: Undefined variable…Report