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Overnight – Trump says ’it’s going very well’, Investors disagree as stocks have worst day since the pandemic
US Equities and commodities suffered their biggest one-day slumped since 2020 after U.S. President Donald Trump announced comprehensive trade tariffs, prompting fears of an all-out trade war that could result in a global recession…. Then described it as “going well”
“I think it’s going very well,” Trump said. “It was an operation, like when a patient gets operated on, and it’s a big thing. I said this would exactly be the way it is. President Donald Trump’s announcement of imposing reciprocal tariffs on imported goods to the United States.
A number of the country’s major corporations have been hit hard by the tariffs news, with Apple, down 9%, a prime example given the hefty tariff on China – the base for much of Apple’s manufacturing. Proposed US tariffs on Chinese imports could significantly impact Apple’s profitability, estimating a potential 14% reduction in the company’s net profit for fiscal 2025 if it is not granted an exemption.
Shares of big sellers of imported goods were among the hardest hit. Five Below, Dollar Tree and Gap, for example, all suffered double digit percentage losses. Retailers were also hit hard, with Nike and Walmart slumping after tariffs were imposed on major production hubs including Vietnam, Indonesia and China. Tech shares also dropped in an overall risk-off mood, with Nvidia and Tesla both around more than 7% and 5% respectively.
The Federal Reserve’s decision making as far as rate cuts are concerned could well now be determined by the impact on the U.S. economy from the trade tariffs. Federal Reserve Governor Adriana Kugler said there were “upside risks” to inflation associated with Trump’s policy changes. But these tariffs will likely dampen near-term growth, increase market volatility, and prompt the Federal Reserve to deliver significant rate cuts later this year, according to UBS.
The focus will be on a speech on the economic outlook by US Federal Reserve chairman Jerome Powell on Friday morning (AEDT) to the Society for Advancing Business Editing and Writing Annual Conference in Arlington, Virginia.
ASX SPI 7786 (-1.18%)
The Trump show is the only thing that investors and the media will be talking about today, and the panic will be abundant. US payrolls could compound the misery tonight if the employment numbers have their first negative number since December 2020
We are very surprised that the market wasn’t expecting this, so we remain cautious of a “bear trap” bounce
Unfortunately, the next few months is unlikely to improve as Trump play bluff poker with the world at the expense of the world economy
