Wakey Wakey!!
Markets have kicked into life today, with US equity indices tumbling from their elevated perch. Falling by approximately 2% across the board, the sell off across the Atlantic has left a risk-off feel within markets, with investors flocking to safety. From the two graphs below, investors’ concerns can be clearly seen. The first graph shows both the NASDAQ Composite Index (Blue) and the NYSE Composite Index (Orange) in relative freefall, shedding hundreds of billions of Dollars from the value of US companies. In the second chart, the value of Gold, a traditional safehaven immune from the swings of more volatile and risky assets, can be seen to rise by 0.5% as rising demand unbalanced yesterday’s value.
The rally in safehavens and the selling of more risky assets, including emerging market currencies, has been precipitated by concerns that the trade war between the US and China, the effect of which had started to be priced out, may be reigniting. With the arrest of the Chief Financial Officer of one of China’s largest companies with a market cap larger than that of Apple and with considerable reach within the United States of America, there have been market-wide fears that the ceasefire between the two trading leviathans could be called off and tariffs ramped up once again. Within the Pound, developments in Westminster continue to cause disturbances. The Pound has received a bid today as the possibility of a no-deal Brexit seems increasingly unlikely. Whilst a second referendum would also contribute to political uncertainty, the increasing improbability of Carney’s chaotic no-deal scenario continues to support the Pound.
Today’s Global Market:
Discussion and Analysis by Charles Porter
Global Trade Trends Following Covid, Lock Down, Supply Chain issues and the trade war between China and the USA, while globalisation may not have ended, it is being replaced in significant part by what some economists are naming fragmentation which is the handle given to countries moving production of goods to manufacturing centres nearer to […]
Inflation With markets as ever getting ahead of themselves by many having decided that the inflation peak is a yesterday thing, there is a dawning realisation that with the current levels of USA 6.5%, 9.2% UK and 10.4% EU as at Dec 2022, inflation is not only well above target of 2% but is still […]
A big week indeed Normally the first week of any new month is relatively significant. There is typically an above average volume of data releases with the notable non-farm payrolls in the United States normally the figure analysts are looking out most closely for. February will prove to be no exception with a significant load […]