Unsettling Monday on the Stock Market: US-China Tensions Escalate
USA accused of 'coercive tactics' in trade conflict with China - U.S. allegedly practices "blackmail" in customs argument with China
Pen by Mirjam Bittner, Frank Donovitz, Phil Göbel, Yannik Schüller, and Lennard Worobic
Is the wave of market turmoil continuing? The opening of trading on Monday indicates that our worries might not be misplaced. The ongoing fears of a stock market downturn seem to have some merit, as international stock markets continue to tumble in response to the escalating US tariffs. The German stock index (DAX) experienced an initial drop of around 10 percent at the start of trading, plummeting by over 2,100 points to 18,489 points in the early minutes. Although there was a small recovery, the DAX later fell below the 19,000 points mark once more. Asian stock markets had already been shaken prior.
The crypto sensation, Bitcoin, also suffered substantial losses and dipped below the 70,000 point threshold.
Intensifying Trade Conflict with the US: No Signs of Relenting
There are no indications of de-escalation in the trade clash between the US and the European Union. US President Donald Trump has hinted at possibly entering negotiations under particular conditions. However, Trump's trade representative, Howard Lutnick, has previously confirmed that the US government will persist with their hardline approach, imposing high import duties on goods from almost every country. Chinese stock exchanges were closed on Friday due to a holiday. On Monday, the CSI-300 index, China’s most influential mainland stocks index, dropped by 7.8 percent before the market closed. The Hang Seng index, which represents Chinese stocks in the special administrative region of Hong Kong, plummeted by 11.5 percent.
- Raging Stock Market Volatility
- DAX
- Bitcoin
- Donald Trump
Additional Insights:
- Recent Market Turbulence: There has been a significant rise in market turbulence, with several major stocks experiencing declines. Tech stocks, such as Shopify, PayPal, and Google, are also affected, reflecting broader market concerns like inflation fears and consumer sentiment[1].
- Bearishness Among Investors: Investors are oozing with bearish sentiment, with over 52% of them being bearish about the stock market for the following six months. This level of bearishness is among the highest ever recorded, dating back to the 1980s[1].
- US-China Trade War: Although the US-China trade war has historically been a source of market volatility, the current information does not explicitly pinpoint the ongoing trade war as the root cause of the recent declines on the day dubbed as "Panic Monday."
- Black Friday and Market Events: Black Friday is typically associated with a major shopping day rather than a stock market event. If there was a substantial stock market event on a Friday, it would likely be discussed in broader financial news. However, there is no connection mentioned between the "Panic Monday" event and Black Friday in the provided information.
- I'm not going to be a big fan of this Monday's stock market volatility, with the DAX plummeting by over 2,100 points and Bitcoin dipping below the 70,000 point threshold.
- The escalating US-China trade conflict with no signs of de-escalation might have contributed to the unfounded fears of a stock market downturn, as international stock markets continue to plummet in response to the escalating US tariffs.
- Despite US President Donald Trump hinting at possible negotiations, his trade representative's persistence on imposing high import duties on goods from almost every country suggests that the ongoing trade war might continue to negatively impact the stock market.
