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Investors flee as Trump tariffs slash stocks
Investors rushed to gold, bonds and the yen as they feared a global economic recession following President Donald Trump’s draconian U.S. tariffs. The traders were clearly shaken by the new 10% baseline tariff on imported products plus additional, eye-watering'reciprocal tariffs' on countries Trump claimed imposed high trade barriers against the U.S. Brussels and other capitals of the region were in a frenzy as the EU 27 countries faced a reciprocal 20% levy. The bourses fell between 1.3% to 2% in the early going. Tokyo's stock market fell 2.7% overnight in Asia, putting it on track for its worst weekly performance in almost two years. Wall Street futures fell 3% while the dollar hit a six-month high. JPMorgan analysts said that the tariffs are "significantly higher" than what they had imagined as the worst-case scenario. Fitch, a credit rating agency, warned that they would be a game-changer for the U.S. economy and global economies. Deutsche Bank said it was a once-in-a lifetime event which could knock 1%-1.5% of U.S. economic growth in this year. Olu Sonola, a Fitch analyst, said that "many countries are likely to end up in recession." If this tariff rate is maintained for a long time, you can forget about most forecasts. The rush for ultra-safe government securities that guarantee income has driven U.S. Treasury rates down to around 4%. Germany's 10-year rate, the European benchmark, fell by 8.5 basis points to 2.64%. The tariffs are likely to raise import taxes to levels not seen in over a century in the largest economy in the world. In the event that they trigger recessions, it is likely that central banks will cut interest rates around the globe. This benefits bonds. Nasdaq Futures fell 3.2% before what was expected to a be a turbulent U.S. start. Apple's market cap dropped by over $240 billion after its shares fell 7% on Wednesday. Nvidia's share price dropped by 5.6%, or $153 billion. This is a further addition to the trillions of dollars that have been wiped from the market capitalisations of the "Magnificent 7" tech giants this year. Trump's levies are particularly harsh on Asia. China received a 34% tax, Japan 24%, South Korea 25 and Vietnam 46%. Vietnamese shares fell 6.7% as a result. Australian shares and the Aussie Dollar also fell, as the country too was affected. CHINA FOCUS Investors sold exposure to global growth as countries such as China, Canada and Europe promised countermeasures. Brent futures, which are a good proxy for economic activity and the state of the economy, fell as much as 3%, dropping Brent prices below $73 per barrel. This is likely to be its worst day this year. The gold price reached a record-high of $3,160 per ounce but then slowed down. Meanwhile, the Japanese yen rose more than 1.5 percent to 147.01 dollars as traders sought safety outside the U.S. Dollar. The Swiss Franc, another safe haven, reached its highest level in four month as the euro also jumped 1% to $1.0970. Adam Hetts is the global head of Multi-assets and Portfolio Manager at Janus Henderson Investors. He said: "Eyewatering tariffs country by country screams 'negotiation tactics' which will keep markets in a state of tension for foreseeable future." China's currency remained relatively stable, with the yuan dropping only 0.4% in spite of tariffs on Chinese exports exceeding 50% and Vietnam being hit as a result. The Chinese economy is large and there's a hope that Beijing will support Hong Kong and Shanghai stocks. Losses in Hong Kong were limited to 1.5%, and Shanghai losses to 0.5%. George Saravelos, strategist at Deutsche Bank, said that China should be the main focus of attention in the coming days. He asked: "Will China wait for trade talks... or will it absorb this shock? "Or will China try to 'export the shock'... via devaluation of yuan?"
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Trump's tariffs dim the safe-haven shine of the dollar
Investors are avoiding the dollar as a safe place to store money during turbulent times. They are worried about tariffs, and their effect on U.S. economic growth. U.S. president Donald Trump announced on Wednesday far more extensive and larger tariffs against roughly 60 countries. These included massive tariffs against China and its biggest trading partners. As equity markets trembled over the tariff news, the dollar fell broadly. Take a look at how the dollar compares to other safe havens. 1/ GREENBACK TAKS BACKSEAT Dollar has lost its luster as a safe investment option, mainly because of domestic turmoil caused by Trump's tariffs. These have increased the risk of an American recession. Both the S&P 500 and the dollar have been falling recently. This is a sign that the dollar has not benefited from the safe-haven flow. Van Luu is the Russell Investments' head of currency strategy and fixed income. He said, "I used to think that the yen, the Swiss franc, and the dollar were the safest currencies. Now I am beginning to change my mind." The dollar index is down nearly 4% and has had the worst year start since 2016, according to LSEG. It seems investors are yet to price in recession risk, which is why dollar weakness persists as capital continues to flow out of U.S. investments amid the fading economic exceptionalalism, said Rong Ren Goh. He is a portfolio manager at Eastspring Investments, Singapore's fixed income team. While Trump's loose economic policies have hurt the dollar's reputation as a safe-haven currency, some investors believe it will eventually regain its appeal as global growth slows. GOLDEN HISTORY Gold has been a safe haven asset since before any financial system. Gold tends to increase in value as investor anxieties rise. The 1970s energy crises, 1980 U.S. economic recession, 2007-08 global financial crash, and the COVID pandemic of 2020 have all seen a rise of the price of gold. Gold has almost doubled over the last two-and-a half years, reaching all time highs of $3,000 per ounce. Central banks, retail investors and portfolio managers have all bought gold to protect themselves against inflation spikes that were caused by the COVID crises and the subsequent global energy crisis. They continued to buy gold even when inflation began to ease. With Trump's isolationist policies, many are buying gold to replace the dollar. FIGHTING BACK The yen, the Japanese currency, is one of the most popular currencies that benefits from safe-haven flows. It usually performs well during times when stock prices are falling. The yen had its best day ever against the dollar on Wednesday. It has risen almost 7% this year. Meanwhile, another safe haven, the Swiss Franc, has gained more than 4%. Justin Onuekwusi is chief investment officer of investment firm St. James's Place. He said, "The yen gains if the S&P index is volatile. That's something we've been more inclined to tilt towards." 4/ GET DEFENSIVE Stocks are often hard hit by recessions and financial crises. Investors make money by grabbing their cash and running for safety. Most investors cannot give up on the equity market, and so they will tend to buy stocks that are expected to weather recessions well. These include drugmakers, utilities, and food and beverage companies. Over the past 25 years, defensive stocks, those that are more closely tied to the global economy such as technology and mining stocks, have consistently outperformed cyclical shares. Even though there is no immediate recession in sight, a global basket of defensive stocks has dropped less since Trump's election victory than a basket cyclicals that had been boosted by expensive tech and AI shares, reflecting investor caution. 5/ BETTING BONDS For now, renewed tariff anxiety has reduced the pressure on government bonds, which typically benefit from flows to safe-haven assets during times of global stress. Germany's benchmark Bund yield has dropped from the five-month highs reached last month. This is due to expectations that an increase in German spending would lead to a rise in bond sales. The 10-year Treasury yields in the United States are set to have their largest weekly decline in five weeks, with yields down by more than 10 basis point on Wednesday alone. But it's true that not all of this has been driven by a desire for safety. Tariff concerns have also increased recession risks, and the likelihood of further global rate cuts. This is a background that usually benefits bonds. Eric Clark, portfolio director at Alpha Brands, San Diego, said that he still believes this chaos was created to create panic. The uncertainty is driving yields lower at a time when demand is high for our debt, allowing us refinance $4 trillion to 5 trillion dollars at better rates.
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Rafael Devers and the Red Sox win series against Orioles
Boston Red Sox have worked out a few kinks in their first week of play, but they should have a positive attitude going into Thursday's game. After snapping a losing streak of four games, the Red Sox will face the Baltimore Orioles at the final game of a three-game set. Rafael Devers, Boston's designated hitter, said that there was no need to worry even though he had started the season with a 0-for-19 record through Tuesday. He started the game Wednesday at Baltimore 0-for-2, but then added a run scoring double in the 5th inning. Boston won 3-0. Devers stated, "I knew that it would come." "I received many texts from worried people, but I was fine." His teammates were enthused by his performance. Dever stated, "It's a great feeling to see that reaction." Dever said, "It makes me happy to see that they are paying attention to my at bat and supporting me." Trevor Story scored the first run of the game, which was his first RBI this season. He went 3-for-4, raising his average from.133 up to.263. Devers stated, "We know what type of players and team we are." "We knew that everything would change." Story stated that there are signs that Boston has "a really strong lineup". On Wednesday, the Orioles did not have a single extra-base run. They only had four singles. The Red Sox's Garrett Crochet started the first eight innings and Aroldischapman took over the ninth. Brandon Hyde, Baltimore's manager, said: "We had a hard time putting them under pressure." The Orioles' lineup could be drastically different for the final game of the series. Gunnar Henderson, a shortstop with a right intercostal injury, played his fourth rehab game with Triple-A Norfolk on Wednesday, and went 0-for-3 against Charlotte. He now has accumulated five home runs, four RBIs, and.263 (.263) in 19 games. It was possible that he could be listed on Baltimore's lineup Thursday afternoon. Jackson Holliday should be back in the Orioles lineup following his Wednesday night rest. Hyde said that the 21-year old infielder may sit out certain left-handed pitchers. Tanner Houck (1-0, 6.35 ERA), will be the pitcher for Boston on Thursday. In his debut season, the right-hander allowed four runs in 5 2/3 innings -- including two homers -- to Texas on Friday. Houck has a 4-3 career record with a 3.50 ERA against the Orioles in nine appearances, five of which were starts. Charlie Morton, the Baltimore Orioles' right-hander (0-1, 10.80 ERA), will be looking to rebound from a poor first outing in Toronto on Friday, when he lasted only 3 1/3 innings. Morton has a record of 8-2 and a 4.21 ERA over 15 career starts. In 83 1/3 innings, he has struck out 88 Boston batters. Eight wins are his second-most against any team. Baltimore's first six games have been a mix of wins and losses. The Orioles scored 29 runs across their three wins, which means they can still have a breakout season despite Wednesday's sluggish offensive performance. Zach Eflin said, "Show up Thursday and win the Series," after he took the loss Wednesday. He had allowed three runs in 6 innings. The Red Sox will play their first home game on Friday, against the St. Louis Cardinals. Field Level Media
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Floods 'generational in nature' to hit US Midwest and South
The National Weather Service issued a warning on Thursday about "generational" flooding in the Southern and Midwestern United States. Storms tore across the country, from Texas up to Michigan, dropping hail and causing tornadoes. On Wednesday, at least 19 tornadoes hit, destroying houses and businesses and injuring eight people. Hundreds of thousands were left without power. The NWS stated that this was only "the beginning" of a potentially historic and multi-day heavy rain event. Arkansas, Missouri Tennessee and Mississippi are facing the threat of "generational flooding event". Some locations could see up to 15 inches (38cm) of rain before the weekend. This could cause rivers burst. As of early Thursday, no fatalities had been reported. Local officials reported that four people were injured, one of them critically, in Craighead County, Arkansas. Four others were also injured, including one in a church in Ballard County, Kentucky. The railroad company BNSF has announced that it received a Reportage The cause of the derailment of a train near Bay, Arkansas was not specified. Arkansas, Kentucky, and Tennessee declared an emergency late Wednesday. The National Weather Service warned that parts of Arkansas and Missouri, Indiana, Illinois and Texas, were at high risk for severe thunderstorms Thursday. They also warned of further tornadoes, large hail and dangerous flooding. Scott Kleebauer said that the word for Wednesday was "chaotic." This is a wide area of storms moving slowly eastward, extending from southeast Michigan to southeastern Arkansas. The Missouri Emergency Management Agency reported that a tornado which hit Nevada, Missouri had caused "major damages to several businesses. Power poles were snapped, and several empty train cars were flipped on their side by the powerful storm!" According to PowerOutage.us, more than 400,000 customers lost power in the storm-hit region. Reporting by Brad Brooks, Colorado; Surbhi misra, Bengaluru; Editing by Peter Graff
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The Trump tariffs have caused a drop in the price of Bourses in the Gulf
The Gulf stock markets fell on Thursday morning, amid concerns that the U.S.'s reciprocal tariffs could worsen trade tensions globally and tip the world towards recession. On Wednesday, U.S. president Donald Trump announced a 10% tariff as a baseline on all imports and increased duties on dozens countries, including its largest trading partners. Saudi Arabia's benchmark stock index fell by 0.4% after the return to trading following a four-session Eid holiday. Saudi National Bank, the country's largest lender, fell 1.5%. Saudi Aramco, the oil giant in Saudi Arabia was down by 0.8%. Oil prices, which are a major factor in the Gulf financial markets, have fallen by up to 3% amid fears that trade tensions will limit economic growth and reduce fuel demand. Dubai, the Middle East's tourism and travel hub, saw its main stock index fall by 1.8%. Blue-chip developer Emaar Properties plunged 8.9% in one day, its largest intraday drop since November 2021. Meanwhile, Emaar Development slipped 2.4%. The index in Abu Dhabi fell 0.8% while the Qatari Stock Exchange remained closed due to Eid holidays.
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South Africa seeks new US trade deal after tariff hike, says presidency
South Africa's Presidency said Thursday that new U.S. Tariffs highlight the need for a bilateral trade agreement with Washington in order to guarantee long-term trading certainty. On Wednesday, U.S. president Donald Trump announced global reciprocal tariffs for most imports to the United States. Trump imposed an 8% rate on South Africa. The Presidency issued a statement saying that "the tariffs confirm the urgency of negotiating a new bilateral trade agreement with the U.S. as an essential step in order to ensure long-term trading certainty." These latest tariffs will be in addition to 25% on all cars and auto parts imported into the U.S. that will take effect from Thursday. The levies could have a serious impact on South Africa's exports to the United States of parts and vehicles worth over $2 billion. The President's Office added: "While South Africa remains committed towards a mutually-beneficial trade relationship with the United States... unilaterally imposed punitive tariffs serve as a hurdle to trade and shared prosper," (Reporting and editing by Olivia Kumwenda Mtmabo, Sharon Singleton, and Nqobile Dudla)
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South Africa seeks new US trade deal after tariff hike, says presidency
South Africa's Presidency said Thursday that new U.S. Tariffs highlight the need for a bilateral trade agreement with Washington in order to guarantee long-term trading certainty. On Wednesday, U.S. president Donald Trump announced global reciprocal tariffs for most imports to the United States. Trump imposed an 8% rate on South Africa. The Presidency issued a statement saying that "the tariffs confirm the urgency of negotiating a new bilateral trade agreement that is mutually beneficial with the U.S. as an essential step in order to ensure long-term trading certainty." These latest tariffs will be in addition to 25% on all cars and auto parts imported into the U.S. that will take effect from Thursday. The levies could have a serious impact on South Africa's exports to the United States of parts and vehicles worth over $2 billion. The President's Office added: "While South Africa remains committed towards a mutually-beneficial trade relationship with the United States... unilaterally imposed punitive tariffs serve as a hurdle to trade and shared prosper," (Reporting and editing by Olivia Kumwenda Mtmabo, Sharon Singleton and Nqobile Dudla)
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Iron ore prices fall due to US tariffs but steel demand remains resilient.
Iron ore futures dipped slightly on Thursday, after U.S. president Donald Trump announced a wide range of reciprocal tariffs. However, seasonal demand for this steelmaking ingredient helped to cushion the downward trend. The May contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 0.32% lower, at 788.5 Yuan ($108.05). As of 0707 GMT, the benchmark May iron ore traded on Singapore Exchange was down 0.84% at $101.95 per ton. Broker Galaxy Futures stated in a report that U.S. Tariffs were more aggressive than anticipated and will have a negative impact on the ferrous market. Trump announced a minimum 10% tariff on goods imported into the United States on Wednesday, and much higher duties for products from dozens countries. This is a worsening of a trade conflict that could drive inflation up and slow down U.S. economic growth. The new tariff will total 54% on Chinese imports. Beijing on Thursday called for the United States' latest tariffs to be immediately canceled and promised countermeasures in order to protect its own interests. Steelmakers increased production during the construction peak season of March and April to cushion the price fall. The recovery in steel consumption will encourage steelmakers in China to increase their hot metal production, according to a report by Mysteel. ANZ analysts said that iron ore exports were down 17% on a year-over-year basis during the current Australian cyclone seasons. Coking coal and coke, which are both steelmaking ingredients, were down by 0.2% and 0.64% respectively. The Shanghai Futures Exchange saw a loss in most steel benchmarks. Rebar fell by 0.19%, stainless steel dropped 0.92% and hot-rolled coils were down 0.63%. Wire rod was up almost 0.4%. China's financial market will be closed for the public holiday on Friday. Trading will resume Monday, April 7.
Wildfires rave out of control near Los Angeles, killing at least 2
A minimum of 2 individuals were killed as a trio of fastgrowing wildfires raged out of control on Wednesday near Los Angeles, destroying numerous structures, sweltering hillsides and triggering officials to buy some 70,000 individuals to evacuate their homes.
Intense winds were hindering firefighting efforts and fuelling the fires, which have expanded unimpeded because they began on Tuesday.
The biggest blaze had taken in more than 5,000 acres in the picturesque Pacific Palisades neighborhood, which lies west of Los Angeles in between the beach towns of Santa Monica and Malibu and is home to many movie, television and music stars. More than 1,000 structures have actually been destroyed, Los Angeles County Fire Chief Anthony Marrone stated at a news conference on Wednesday.
Another fire, the Eaton fire, had grown to more than 2,000 acres as it burned some 30 miles (50 km) inland in Altadena, near Pasadena. Two fatalities were reported there, though officials stated they did not have additional information.
The Hurst fire, in Sylmar in the San Fernando Valley northwest of Los Angeles, had actually surpassed 500 acres. All 3 fires were 0% consisted of, officials stated.
A high number of considerable injuries had occurred amongst homeowners who did not follow evacuation orders, Marrone said.
Authorities alerted that the gusty winds were anticipated to continue throughout the day.
We are absolutely not out of threat yet, with the strong winds that continue to press through the city and the county today, Los Angeles City Fire Chief Kristen Crowley stated.
The skies above Los Angeles glowed red and were blanketed by thick smoke as the sun rose on Wednesday.
As the flames spread and locals began evacuating after the fires broke out on Tuesday, roadways were so jammed that some people deserted their vehicles to leave the fire. Emergency situation responders were going door to door to press evacuation orders.
California Governor Gavin Newsom stated a state of emergency on Tuesday.
Roughly 100 of the 1,000 public schools in the Los Angeles Unified School District were shut down, Superintendent Alberto Carvalho told journalism conference.
Pacific Palisades resident Cindy Festa said that as she evacuated, fires were this near the automobiles, showing with her thumb and forefinger.
Individuals left their vehicles on Palisades Drive. Burning up the hillside. The palm trees - everything is going, Festa stated from her vehicle.
David Reed said he had no option but to leave his Pacific Palisades home when law enforcement officer appeared at his door. They laid down the law, Reed said. He gathered his crucial belongings and accepted a. trip from officers to the evacuation center at the Westwood. Recreation center. I grabbed my trombone and the latest book I've been reading,. which is my Jack Kerouac anthology here, since I'm a beatnik,. he stated, adding that he could see flames approaching his home.
Pacific Palisades is among the most costly areas. in the nation. A typical home was valued at $3.7 million since. the end of 2023, according to Zillow, more than all however 4. other postal code in the United States.
AT LEAST THREE BLAZES
In the Pasadena area, the Eaton fire swallowed up homes, a. synagogue and a McDonald's dining establishment.
Practically 100 residents from a retirement home in Pasadena were. left, CBS News stated. Video showed elderly locals, numerous. in wheelchairs and on gurneys, crowded onto a smoky and. windswept car park as fire trucks and ambulances attended.
Around 188,000 homes and organizations in Los Angeles County. lacked power on Wednesday, data from PowerOutage.us. showed.
Several burn victims were treated after strolling toward. Duke's dining establishment in Malibu in the evening, the Los Angeles. Times reported, mentioning a fire authorities.
We're facing a historic natural disaster. And I believe that. can't be stated strong enough, Kevin McGowan, director of. emergency situation management for Los Angeles County, said at journalism. conference.
Firefighting aircraft scooped water from the sea to drop it. on the flames as they engulfed homes. Bulldozers cleared. abandoned cars from roads so emergency situation automobiles might pass,. television images revealed.
The fire singed some trees on the premises of the Getty. Rental property, a museum filled with valuable artworks, however the. collection stayed safe mostly due to the fact that nearby bushes had actually been. cut as a preventive step, the museum said.
Before the fire started, the National Weather Condition Service had. provided its highest alert for extreme fire conditions for much of. Los Angeles County from Tuesday through Thursday.
With low humidity and dry plant life due to an absence of rain,. the conditions were about as bad as it gets in terms of fire. weather condition, the service said.
Newsom stated the state had actually placed personnel, firetrucks. and aircraft in other places in Southern California since of the. fire danger to the larger region. California had actually protected federal. grants to suppress all 3 fires, he stated on Wednesday.
President Joe Biden said in a declaration over night that he. had been informed on the wildfires and had offered federal help.
(source: Reuters)