The collapse in the markets, which began on Friday, flared up with renewed vigor from the start of trading. Trump’s new statements on a trade war leave no room for optimism.
Futures for US indices lose almost a percent. And this despite the fact that on Friday, stock indicators closed with a decrease of 2.5-3%.
If the market situation persists until the opening of the main session in New York, then an important technical level will be passed and the collapse is likely to continue.
In the foreign exchange market, the offshore renminbi since the opening has fallen by more than half a percent.
Against the backdrop of total confusion, investors with redoubled energy are buying gold. On Friday, an ounce of precious metal went up by about $ 30, and today the $ 1,550 mark was tested.
By the way, the Chinese currency is now trading at a minimum against the dollar since 2012.
Futures on treasuries opened up rapidly, which means a further drop in yields.
Well, there is also a drop in the commodity market: oil futures are losing within a percent, testing Friday’s lows at $ 58.5 per barrel.
Earlier, Vesti. Economics repeatedly wrote that the current panic in the markets would only increase. The situation will most likely resemble the events of the end of last year. Market participants, we can say, in this way simply beg the regulators, in particular the Federal Reserve System, for new large-scale incentives.
If at the September meeting the Fed lowers the rate by only 0.5%, this will not be enough. Obviously, to prevent a collapse, concrete promises of incentives are needed along with a wider decline.
It is worth adding that on Friday Trump scared the markets with a hint of impending interventions in the foreign exchange market in order to weaken the dollar.
Donald J. Trump
As usual, the Fed did NOTHING! It is incredible that they can “speak” without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work “brilliantly” with both, and the U.S. will do great …
18:57 — Aug 23 2019 year
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Trump also announced an increase in the size of planned new duties on Chinese goods. In addition, the American leader called for leaving China. According to US Secretary of the Treasury Stephen Mnuchin, the president can introduce a state of emergency and instruct American companies to leave China.
He also noted that Trump is successfully using his authority in resolving certain issues, for example with Mexico. To erect a fence on the border with this country to combat the penetration of illegal migrants into the United States, Trump declared a state of emergency, which allowed him to get the necessary funding bypassing Congress.
And although the president almost always cares about the capitalization of the stock market, the latest statements are against him.