📆 Thursday, April 3
► Europe’s Stoxx 600 index tumbled 1.7%, tracking declines from Asia amid a global sell-off triggered by Trump’s aggressive tariff announcement. Footwear and apparel companies such as Adidas and Puma plummeted almost 10%, hurt by tariffs on Vietnam and other key production hubs. Major indices slid, with Germany’s DAX falling 1.8%, its lowest level in nearly two months—while France’s CAC 40 declined 2.2%. The EUR rose 1% to a six-month high, driven by signs that the EUR is preferred over the USD – thus also benefiting from concerns about the US economy. European Commission President Ursula von der Leyen described the tariffs as a “major blow to the world economy” and stated that the EU is preparing countermeasures if negotiations fail.
► U.S. stock futures crashed (incidentally worse! than the indices in Europe and Asia – especially China),,with the S&P 500 down 3.2%, and Nasdaq down over 3.6% as investors braced for the fallout from Trump’s sweeping 10% tariffs on all imported goods + Trump's ” reciprocal” tariffs. Shares of multinational giants like Apple, Caterpillar, Boeing, Nike etc. fell sharply. Bond yields collapsed, with the U.S. 10-year Treasury yield dropping nearly 15 basis points to 4.05%, signaling heavy demand for safe havens (US bonds). The tariffs could accelerate the likelihood of a U.S. recession, particularly if retaliatory measures are implemented. Analysts from Deutsche Bank warned that tariffs could shave as much as 1.5% off U.S. GDP this year while adding a similar amount to consumer inflation. Robert Lindner, Chief Analyst at SmartTrader, also mentioned that the US economy and US companies are not at all prepared for these dramatic changes – significantly higher prices will be the result, as US companies will not be able to replace or produce all the goods (in terms of quality and quantity) that are now likely to be imported less into the US. Trump seems to not understand that the US consumer has to pay the lion's share of these tariffs.
► Asian stocks followed global declines, with Japan’s Nikkei 225 sinking 2.73%. Japanese equities hit their lowest point in months, with additional headwinds from a stronger JPY with the USD/JPY falling even below 147.000. China’s Shanghai Composite declined a moderate 0.24%, and the Shenzhen Component slid 1.4%. The Hong Kong Hang Seng Index dropped 1.54%. China vowed retaliation, with the Commerce Ministry stating that the tariffs “do not comply with international trade rules” and are acts of “unilateral bullying.” Australia’s ASX 200 fell 0.94%, a three-week low.
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