“This Was Totally Out Of The Blue”: Global Stocks Crash As Trade Talks Collapse
by Tyler Durden
ZeroHedge.com
Mon, 05/06/2019
The S&P closed on Friday at a new all time high, with hardly a concern in the world and nothing but blue skies ahead… and then just two tweets from Donald Trump shortly after noon on Sunday afternoon shattered the market’s idyllic picture, when the US president admitted that trade talks with China are not only not going “optimistically”, but have effectively collapsed and tariffs on Chinese imports would be hiked.
The result, discussed overnight, was a “sea of red” as risk assets and currencies across the globe collapsed, offset by a flight into safe assets including Treasuries and the US dollar. The MSCI world index fell half a percent.
Trump sharply escalated tensions between the world’s two largest economies with tweeted comments on Sunday that trade talks with China were proceeding “too slowly”, and that he would raise tariffs on $200 billion of Chinese goods to 25 percent on Friday from 10 percent. The tweets stirred up the near-record calm market mood arising from signs of improving economic growth in China and the United States, and from comments from Trump and other senior U.S. officials that trade talks were going well.
As risk reeled, the VIX headed for its biggest increase in 2019 (something we discussed as a distinct possibility on Sunday afternoon)…
The Rest…HERE
