S&P Futures, Global Stocks Tumble As Trade War Fears Return; Yuan Plummets
by Tyler Durden
ZeroHedge.com
Thu, 08/02/2018
It has been the case that every single day for months, the market’s mood is determined by whether trade tensions are better or worse (however subjectively this is determined). And judging by the bloodbath in the market snapshot below, today they are much worse.
For those who missed it, this is the key driver of overnight’s risk off: President Trump asked Lighthizer to consider 25% tariffs on USD 200bln of Chinese goods, while officials also commented that stronger actions are needed on China but added that President Trump is open to negotiating with the Chinese President. China Commerce Ministry said China will immediately retaliate to defend its dignity and people’s interests.
The resulting market hot takes were familiar: “fears of an escalating trade dispute between the United States and China” blasted numerous sellside notes and financial websites. And sure enough, following Trump’s threat to hike tariff rates from 10% to 25% on $200BN in Chinese imports – which incidentally was first reported on Tuesday – stocks from Asia to Europe tumbled, with S&P500 futures joining and sliding to session lows, dragging the S&P back under 2,800. The dollar climbed and bonds were mixed with central bank policy high on the agenda.
The Rest…HERE
