Global Stocks Tumble; Gold, Safe Havens Jump On Doubts Trump Tax Cuts Will Pass

Wednesday, March 22, 2017
By Paul Martin

by Tyler Durden
ZeroHedge.com
Mar 22, 2017

“Warning! US equities can occasionally go down as well as up a lot.”

That’s how Deutsche Bank’s Jim Reid begins his morning wrap note, and sure enough after months of warnings that the market has gotten way ahead of itself in pricing in the success of Trump’s various domestic policies (confused? read last week’s preview of just this event occurring from JPM), global markets are waking up to a sea of red as the US risk rout spreads, leading to a slide in European stocks for the third consecutive day led by banks and miners, Asian markets suffering their worst day of the year, and S&P 500 futures pointing to a modestly lower open again as the yen and gold rise.

The catalyst, it will come as no surprise, is the end of the Trump rally which yesterday finally ended with a bang, not a whimper, as investors questioned the U.S. president’s ability to enact his pro-growth policies, casting doubt on the so-called reflation trade. Equities dropped across the globe as safe-haven assets advanced. A rally in government bonds continued and gold and the yen both extended gains. Base metals tumbled, with iron ore approaching a bear market. Investors’ flight to safety pushed down U.S. Treasury yields. The closely watched gap between U.S. and German 10-year yields touched its narrowest since November at around 195 basis points. German 10-year yields fell further and were last down 4.8 basis points at 0.41 percent.

“Market participants are worried about the effects and feasibility of Donald Trump’s growth program,” DZ Bank strategist Birgit Figge said.

The Rest…HERE

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