Jin Shi finished: Trump's tariffs "deadlocked" detonated the global stock market sell-off, and a number of major bank analysts warned of recession risks

GoldenOctober2024

2025-04-07 09:23:31

The global panic intensified Last week, the news of the US government’s large-scale tariffs came out, and the global stock market evaporated trillions of dollars in market value for two consecutive days. On Monday, U.S. stocks continued to fall sharply, and market fears of recession risks further increased. Some investment banks expect the Fed to cut interest rates as early as May. 2. “Stubborn” stance: Trump has no intention of backing down Genvil, Moneyfarm, IG investment officials bluntly said that the White House has not shown any willingness to stop or negotiate, and Trump does not seem to care about the current market turmoil. If this hawkish stance continues, it will be difficult for the market to see a quick recovery in sentiment. 3. Volatility exploded, risk aversion spread, and the VIX index once approached a high of 60, and funds accelerated their flight from risky assets and poured into safe-haven products such as U.S. bonds. Credit spreads and CDS (credit default swaps) prices have climbed, causing some institutions to worry about the risk of a liquidity “vacuum”. 4. “Forced” selling: Leverage, margin have become fatal triggersOrd Minnett and other investment bankers pointed out that last Friday’s sharp drop has triggered some margin calls. In today’s panic, traders are “sell first, talk later” – no one wants to wait until the next liquidation alert, further exacerbating market volatility. 5. “Negotiate or bring down the economy” RBC Capital believes that this tariff storm is not a “sudden black swan”, but the result of active pressure from the United States. If the U.S. government does not engage in dialogue with other economies as soon as possible, the devastating effects may spread to consumers and businesses, and turn into a substantial recession. 6. Fed wait-and-see: Easing expectations are rising, Dakota Wealth and other institutions have reminded that although the Fed has said that it will “wait for more information” before making a policy decision, the Fed may act earlier if the market correction continues and economic data deteriorates significantly. The latest traders are betting on a significantly higher probability of a rate cut this year. 7. Disagreement: Is it a good opportunity to buy the bottom or continue to wait and see? Some private equity and institutional investors are instead focused on “when to buy the dip.” However, investment strategists at Saxo Bank believe that the market has not yet found clear support, risk assets continue to face downward pressure, and any blind dip buying faces huge volatility risks. 8. Follow-up observations: The key is the White House policy turn, and many analysts stressed that “once the Trump team shows obvious signals of concessions, the market may be able to take a short breather.” "Until then, global equities will remain highly sensitive, and the slightest stir could trigger a new round of collective sell-offs.

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GoldenOctober2024

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