Global Markets Tumble As Trade War Fears Spike; China Crashes
by Tyler Durden
ZeroHedge.com
Tue, 06/19/2018
DAX and FTSE at 1 month lows in sour risk tone as Trump issues USD 200bln tariff threat
Tariff threats send the DXY to YTD high
Looking ahead, highlights include, the Technical committee meeting between OPEC and non-OPEC members, ECB’s Lane and Fed’s Bullard
The headline news that dominate markets today are not that different from yesterday, especially since it is really just one: the escalating trade war between the US and China. Only unlike yesterday, when futures were modestly lower and levitated higher all day, with the Nasdaq closing in the green and the S&P barely lower, today’s tripling down by the Trump administration, which has now threatened to re-double down and set 10% tariffs on up to $200BN in Chinese imports has finally spooked US equity futures and global markets, with the Dow futures down 340 points this morning, and global markets a sea of red, while safe havens such as the dollar and US Treasurys are sharply bid.
In response, China Mofcom said China will have to adopt comprehensive steps to fight back firmly and warned it will take qualitative and quantitative measures if US publishes additional tariff list; China also warned that it was preparing a second round of tariffs on US energy; US oil, gas and coal face 25% levy in threatened second round of duties.
While tough trade talk is nothing new for investors in 2018, a sense that stress is ratcheting up between the U.S. and China is clearly taking a toll on markets. The protectionist moves come at a time when many are already voicing concern that global growth could lose momentum, as it also contends with America’s faster tightening of monetary policy and the end of European stimulus.
“What you saw at the start of the year was global synchronized growth,” Emad Mostaque, co-chief investment officer at Capricorn Fund Managers, said in an interview on Bloomberg Television. “It was a cooperative game. Now, we’re moving to a more competitive, negative-sum game.”
In light of the escalating tit-for-tat trade war, which so far shows no signs of stopping, and to the contrary appears to be accelerating, S&P futures have fallen sharply throughout the session, while Dow futures are -340 points, with the cash index set for its 6th consecutive down day.
The Rest…HERE
