So much for yesterday’s Amazon bounce.
Just before 4AM EDT, a Bloomberg headline hit which has not only unleashed a furious global selling wave, sending the S&P lower by nearly 2% and the Dow 600 lower, but may have changed the course of history: that’s when China announced it was striking back in the ever faster and more furious trade war between the US and China:
While we detailed the response earlier, for those who missed it, China announced it would launch reciprocal tariffs on 106 US products worth $50bln in bilateral trade, setting a new tariff rate of 25% on soybean, autos and chemicals. While the Chinese response was expected, the inclusion of soybeans was not, and will likely infuriate Navarro/Trump and lead to another round of US tariffs. China Ministry of Commerce also said it would adjust tariffs on ethylene glycol and diethylene glycol sold by firms including Dow Chemical (DOW), Ineos and BASF (BAS GY) among others.
And in an ominous warning that more is coming, China said that while its door to the US remains open for negotiations, if the US wants to keep fighting, China will hold onto the last, according to the Chinese Vice Commerce Minister.
The result was a freefall in both S&P futures, which were down nearly 50 points from Tuesday’s close…
… but also in the Dow Jones, which plunged as much as 600 points…
… and, of course, Emerging Markets, with the MSCI EM stock index heading for its lowest close in two months with EM currencies a sea of red across the board.
And speaking of sea of red, this is what global cash markets and futures look like right now.
…click on the above link to read the rest of the article…
