Hi Everyone,
Financial markets appear to be reacting to the latest escalation in the trade war between the U.S. and China.
It now appears that the United States may have the upper hand due to the wide trade imbalance between the two nations. Indeed, it would be very difficult for the Chinese to find $200 billion worth of US imports to curtail.
Under the circumstances, I guess you could say that markets are holding up pretty well, as we’ll see below. Even though the declines are sizeable, this doesn’t come close to the volatility we saw in February.
President Trump’s approval ratings are now as high as they’ve ever been despite outrage over recent hardline anti-immigration actions that saw authorities separating more than 2,300 children from their parents.
@MatiGreenspan
eToro, Senior Market Analyst
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Traditional Markets
Looking at the financial markets today it seems there is a bit of fear creeping in.
The Chinese stock market is down 3% and the Japanese market isn’t far behind with losses of 2.5%. Though these are quite substantial movements for any stock index, by putting things in context on the long-term chart we can see that it’s not the end of the world.
Please notice how in February, before the whole trade tensions began, the stocks experienced a much sharper sell-off.
On this chart of the VIX we can also see that even though volatility spiked yesterday, it’s still way below the levels seen…