Markets remain frail following the worst trading day of 2019. The Fed’s interest rate cut and ongoing battles between the U.S. and China placed a roadblock in the bull market.
Lollapaloozers. Investors and concert-goers shared the post-festival crash on Monday.
- Stock Market sweetness turned sour in a four-day freefall that wiped out $1.4 trillion in S&P 500 stock value.
- ENCORE: DIJA tumbled 767 points on Monday, the sixth-lowest point decline ever.
Bear in a China Shop. Tensions between the U.S. and China captained the dip into the abyss.
- President Trump turned the keys, announcing new tariffs last week: 10% on the $300 billion worth of remaining Chinese imports yet to face U.S. levies.
- Chinese authorities stepped on the gas, allowing the Yuan to fall below the 7-yuan-to-the-dollar breaking point, its lowest level since the Great Recession.
The treasury department dealt the final blow, designating China a “currency manipulator” for the first time since the Clinton administration. The weakened yuan would make Chinese goods cheaper and the U.S. views that as a “major violation” in retaliation to the new tariffs.
How does this affect my wallet?
Play nice. Moving forward, tensions between the two nations is the most important key in the market’s rebound and long-term stabilization.
- Per Tom Essaye of The Sevens Report, “If escalation continues that will cause a further pull-back, regardless of what the Fed is going to do.”
The stock market plummeted Monday after ongoing trade battles between US and China, then regained some steam Tuesday. Politics and foreign policy often have major affects on the market; this is a prime example.
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