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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 $101.95 per ton. Broker Galaxy Futures stated in a report that U.S. Tariffs were more aggressive than anticipated and will have a negative impact on the ferrous market. Trump announced a minimum 10% tariff on goods imported into the United States on Wednesday, and much higher duties for products from dozens countries. This is a worsening of a trade conflict that could drive inflation up and slow down U.S. economic growth. The new tariff will total 54% on Chinese imports. Beijing on Thursday called for the United States' latest tariffs to be immediately canceled and promised countermeasures in order to protect its own interests. Steelmakers increased production during the construction peak season of March and April to cushion the price fall. The recovery in steel consumption will encourage steelmakers in China to increase their hot metal production, according to a report by Mysteel. ANZ analysts said that iron ore exports were down 17% on a year-over-year basis during the current Australian cyclone seasons. Coking coal and coke, which are both steelmaking ingredients, were down by 0.2% and 0.64% respectively. The Shanghai Futures Exchange saw a loss in most steel benchmarks. Rebar fell by 0.19%, stainless steel dropped 0.92% and hot-rolled coils were down 0.63%. Wire rod was up almost 0.4%. China's financial market will be closed for the public holiday on Friday. Trading will resume Monday, April 7.
After Northvolt, Europe's battery hopes rely heavily on China
Northvolt's. monetary collapse has actually not totally crushed Europe's dream of. establishing its own electric car batteries but satisfying it. is likely to require Chinese cash and knowledge.
InoBat CEO Marian Bocek's Slovakian start-up had to work. hard to secure financing till China's fifth-largest battery maker. Gotion bought a 25% stake last year and formed a. joint endeavor with InoBat to construct European gigafactories.
On Friday, InoBat revealed 100 million euros ($ 104 million). in Series C financing, taking its total raised to well over 400. million euros.
Coming simply weeks after Northvolt's failure, the investment. shows European EV battery projects can still raise cash.
However rather of an independent European industry, the standard in. future might be joint endeavors that likewise rely on China's. low-margin EV battery dominance, according to interviews with a. dozen executives, financiers and analysts.
They pointed out the Gotion-InoBat Batteries (GIB) tie-up and a. offer revealed recently between Stellantis and CATL .
Battery startups are just not the flavour of the month,. said Lacie Midgely, a research study analyst at UK investment bank. Panmure Liberum. Institutional investors are trying to find. strategic investors before they'll get on board.
In 2023, Hefei-based Gotion had around 150 gigawatt hours. ( GWh) of small battery capacity, enough to produce batteries. for between 1.5 million and 2 million automobiles.
Morningstar analyst Vincent Sun forecasts it should strike 270. GWh in 2025 - dwarfing Europe's existing capability.
It made a big distinction that InoBat has a partner like. Gotion on board, said Vikram Gourineni, executive director at. Indian battery maker Amara Raja, a lead investor in. InoBat's Series C round. Amara Raja likewise took part in. InoBat's Series B round and has actually signed a licensing offer for GIB. battery innovation.
Gourineni said high-profile failures by start-ups like. Northvolt and Britishvolt have actually left automakers demanding proven. scale due to the fact that they don't want to risk their EV programs.
InoBat has a pilot assembly line making high-performance. EV batteries in Voderady, near Bratislava, and will also be. Gotion's European face for larger gigafactories, Bocek stated.
Financiers take a look at us and see our huge brother (Gotion) will. guarantee our cells get produced, Bocek informed Reuters.
MAJOR BLOW
Sweden's Northvolt raised more than $10 billion however failed. in its strategies to mass-produce EV batteries and compete with. China's skilled and deep-pocketed BYD and CATL .
That has left investors questioning other battery projects. as the energy shift proceeds more gradually than expected.
At least 8 business have actually delayed or abandoned. European EV battery projects this year, including joint endeavor. ACC, led by Stellantis and Mercedes-Benz.
Europe's battery pipeline capacity out to 2030 has fallen by. 176 GWh in 2024, according to data company Criteria Minerals.
But other tasks are gradually getting ready.
France's Verkor, backed by customer Renault, has. secured around 3 billion euros for a 16 GWh gigafactory in. Dunkirk that will produce batteries for 300,000 EVs yearly. when finished around 2028.
Verkor must reveal it can provide to Renault before a. significant number of prospective car manufacturer customers register,. CEO Benoit Lemaignan stated, adding: They are happy to interact. with us, but they wish to see the product initially.
Britain's Ilika will supply test EV battery cells. in 2025 to 17 automakers and battery makers, consisting of Tata. Motors unit Agratas.
Instead of constructing a gigafactory, Ilika wants licensing. agreements to mass-produce its solid-state batteries, CEO Graeme. Purdy told financiers during an early December tour of its pilot. assembly line. It currently has such a handle U.S. company. Cirtec Medical, which will begin producing small batteries for. medical gadgets next year.
Michael Rae, a clean-tech fund supervisor at M&G who was on the. tour, stated Ilika presently falls listed below his fund's market cap. limit however could end up being an investment prospect.
Battery makers like Ilika need to still win significant automobile. clients, he said, requiring a totally different skillset.
RELOCATION FASTER
Gotion's competence helps InoBat resolve problems, stated CEO. Bocek, adding: This assists us move much faster and save money.
He said high-performance European car manufacturers including. Ferrari are currently checking InoBat's energy-dense. batteries, to be made at the low-volume, high-margin 4 GWh. gigafactory the company is integrating in Voderady.
The GIB joint endeavor is meanwhile focused on high-volume,. lower-margin production leveraging Slovakia's position as. Europe's fourth-largest automobile manufacturer and its proximity to. German, Czech and Hungarian automobile plants.
GIB plans a $1.2 billion 20 GWh gigafactory in Surany,. Slovakia to supply batteries for 200,000 EVs each year from 2027. for Volkswagen, which owns 24.45% of Gotion. InoBat's portion is. part-funded by Slovak government help of 214 million euros.
Bocek stated automaker interest in an extra, organized 20. GWh assembly line at Surany has grown, particularly given that. Northvolt encountered problem.
Andy Leyland, co-founder of supply chain professional SC. Insights, said investors and car manufacturers wish to de-risk. production.
The Chinese have mastered inexpensive mass production, so if. you want batteries made, most likely Asian battery makers will. make them, he said. ($ 1 = 0.9619 euros)
(source: Reuters)