Cnn
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Actions are on the rebound on Tuesday, bouncing another miserable day to Wall Street. But the American financial markets ring all kinds of alarm bells that one day in the green can hardly overcome.
Indeed, investors sent a clear message: the trade war of President Donald Trump makes America a dangerous place to invest.
We know this by looking at the larger markets and the assets that traders buy and – let us admit – the sale mainly.
Trump’s stock market has breathtaking statistics. How extraordinary? We are now making comparisons with the great depression.
The industrial average of Dow Jones dropped by 9.1% in the first three weeks of April, the worst performance of the 129 -year index for all April since 1932. The only other April which was worse: April 1931.
The wider S&P 500 plunged 14% during Trump’s first mandate – the worst performance until April 21 for any president from the start of the files in 1928, according to tailor -made investments.
Even with a modest rebound Tuesday – the main indices increased by more than 2% each – Trump has a long way to bounce back to avoid history. The next start for a term for the US stock market in the first 63 days of negotiation was under former president Franklin Roosevelt in 1941, with a drop of just over 9%.
Meanwhile, traders abandoned the US dollar. During the new Trump term, the US dollar dropped 5.5%, the record dating from when the data began to be collected during the term of former president Gerald Ford starting in 1974. The only presidential term for which the dollar started remotely from the start of negotiation.
The dollar has reached a lower on Monday at three years.
As a rule, when investors become nervous, they pay money into the perceived security of the US Treasury obligations – historically security assets to reign all safety. But not this time: the government’s leap sold suddenly. The yields, which are negotiated in the direction opposite to prices, have increased.
The yield of the US Treasury at 10 years old increased to 4.4% a month after diving below 4%. Obligations generally do not balance this quickly.
As merchants have withdrawn money from American stocks and obligations, they paid money into investments in the rest of the world. The MSCI All World index, excluding the United States, increased 2.9% during Trump’s new mandate. This is almost equally with the start of the mandate of former president Joe Biden and only slightly below Trump’s first mandate – two periods when American actions were also booming.
Fearing a global recession, the merchants have spectacularly sold oil, giving us the worst start of the gross of all presidential administration since the second term of former president Bill Clinton, according to Bespoke. Oil dropped 19% during Trump’s second term when merchants fear that travel and shipping demand will fall. Oil dropped almost 24% in the first months of 1997, while Clinton began its second term.
Meanwhile, investors are looking for safe places to park their money. Among the most efficient assets, there is Gold, who still jumped on Tuesday above $ 3,500 per ounce, hitting another record.
Gold has skyrocketed almost 25% during Trump’s new mandate, absolutely crushing the permeable record of 13.5% at the start of his mandate by former president Jimmy Carter in 1977. No other president in the first days of their administrations were almost corresponding to the recent gold in Trump.
The Trump trade war returns the world economy in shock, the International Monetary Fund reported on Tuesday.
“We are entering a new era because the global economic system that operates in the past 80 years is being reset,” the IMF said in a new alarming report on Tuesday which predicted the rapid slowdown in economic growth – especially in the United States – while inflation should revive.
This potentially disastrous combination of slowdown in growth and increased inflation is difficult to overcome. Although economists do not yet expect what is close to the so-called stagflation of the 1970s, the rapid reorganization of global trade dynamics causes enormous confusion and discomfort among consumers, businesses and traders.
“The announcement of Rose Garden of April 2 forced us to drop our projections,” noted the IMF, referring to the announcement of the “Liberation Day” price in which he imposed prices of 10% on all sides and announced to punish the “reciprocal” prices on dozens of countries that have been poor for 90 days.
The CEO of Goldman Sachs, David Solomon, on CNBC on Tuesday, noted that the confusion around the constantly evolving policy of Trump has harmed the ability of the business to make necessary adjustments.
“The level of uncertainty is too high. It is not productive,” he said. “This will have an effect on the growth of the economy, and we will see that, in my opinion, relatively quickly.”
