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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.
New United States ethics czar begins vetting inbound Trump officials
The top U.S. ethics official charged with avoiding government workers' conflicts of interest is about to take the hotseat in Washington, as Presidentelect Donald Trump's brand-new Cabinet and other appointees state their financial possessions and get ready for their new tasks.
We are in touch with the transition team and dealing with them, said David Huitema just recently when he took a seat with Reuters for his first official interview considering that being sworn in for the job on Dec. 16. The inauguration will be Jan. 20.
Ethics specialists state the director of the Office of Federal government Ethics, or OGE, is in the spotlight throughout any governmental shift, however Huitema deals with special difficulties ahead of Trump's 2nd term, assessing a myriad of company ties for Trump, his family and advisors.
Experts pointed to the
short, rocky tenure
of Walter Shaub, the last individual to hold the job when Trump entered the White Home, and kept in mind that numerous of Trump's. most current nominees have actually revealed disdain for the companies they. will run.
After 9 years as principles primary at the U.S. State. Department, Huitema will spearhead the OGE's standard job of. assisting scrutinize dozens of new Senate-vetted candidates and. countless political appointees for possible financial and. personal conflicts.
If he does his task well, opportunities are excellent Huitema could be. fired relatively without delay, Shaub cautioned in an open letter last. month. Huitema told Reuters he trusts the intents of. most brand-new entrants to federal government.
He shared his views on principles education and keeping the. public trust, however decreased to answer particular questions about. the incoming administration. The principles office only deals with. possible government employees, he kept in mind. That implies it will not. vet outside advisors like billionaires Elon Musk and Vivek. Ramaswamy, who Trump has actually asked to recommend cuts in federal government. spending.
Q: What does the OGE do, exactly?
A: The ultimate goal is to ensure that federal workers. are making choices based upon national interest and policy. top priorities of the administration rather than any personal. interest particularly financial interest. ... The OGE itself is a. small company of just about 75 workers, however we work with a group. of about 4,000 principles authorities interspersed, who engage more. directly with federal workers.
One crucial immediate job, he stated, will be with candidate. financial disclosure, assisting guarantee that candidates for Senate. validated positions satisfy their requirements for complete. disclosure of their monetary interests and arrangements.
Q. How does the monetary disclosure procedure deal with. presidential nominees?
A: Normally, he stated, candidates for leading jobs fill out reports. early to assist the workplace determine potential conflicts or steps. the nominee may have to take if they are verified so all that. info is available to the Senate and to the authorities so. they understand what they are getting themselves into.
Q. What sort of due dates are there? When do individuals need to. make these disclosures?
A. He stated candidates need to send a report within five days. of their nomination. ... Our goal is to assist these incoming. officials, help the Senate and do so as effectively as. possible.
He kept in mind that any member of the general public can request a. copy of any financial disclosure report filed with the OGE. The idea is the public, too, can assist play a role in tracking. for disputes of interest.
Q. What is the enforcement system if there are conflicts. of interest?
A: It's not a lot if a dispute comes up on the type. itself, however whether eventually any federal staff members is engaged. with work that then disputes with their monetary interest.
The conflict of interest law is a criminal law, so the. ultimate recourse is prosecution by the Department of Justice. Our role is to actually help encourage employees to avoid that. scenario ...
We will work with the company principles authorities if we find out. of a prospective dispute of interest problem to make sure that. gets addressed, ultimately we work with the Department of. Justice also if essential.
Q: As the State Department principles head, what lessons did you. discover?
A: The majority of employees, profession and appointed, want to follow. the law and want to act with stability and they appreciate the. assistance of principles officials ...
Q: In your Congressional testament, you said you think the. OGE can help in the resist the growing cynicism and. mistrust that can undermine our democratic self federal government. Can. you describe?
A. We wish to ensure staff members ... do not act based on. individual interests, especially financial interests and personal. inspirations. ...
In practice the federal ethics rules may be more minimal in. their actual scope than individuals appreciate, so people's. assumptions that there's a specific concern with compliance with. federal ethics laws might not be well grounded.
Q. What are some examples of interests that are not. significant enough to raise red flags?
A. The financial conflict of interest laws are ... quite. exact in terms of their scope. Either you have sufficient stock to. present a dispute or you do not.
Q. Can principles be taught? For individuals coming from the business. side, interactions are frequently based around How can I utilize this to. benefit me or my business, on purpose.
A. I hope so due to the fact that there are great deal of principles training. requirements, he said, chuckling. He agreed authorities coming. from the economic sector are used to networking and 'What can. you do to benefit somebody so they can in turn advantage you' ... It. is a difficulty to ensure those authorities and new employees. understand that the expectations within government are a little. bit various. ...
Q. What happens if the DOJ does not take principles laws. seriously? Where does that leave you?
A. Criminal prosecution is one extreme, however there is. enforcement at the agency level in regards to discipline.
Q. The president can grant a waiver excusing somebody from. dispute of interest laws, fix? Is that something the OGE. can press back on, or recommend versus?
A. The president in some cases and agency heads or. authorities ... can grant exemptions however need to talk to the. OGE. He said exemptions can be given when the capacity. dispute of interest isn't deemed that substantial. Eventually OGE requires to know when a waiver is provided. They can. be revealed..
(source: Reuters)