Markets this year – and newsflow in general – appear to be rapidly transitioning from one major theme to another. According to DB’s Jim Reid, in mid-January, the UK was the focus of investors as global yields surged. Just a week later, Deep Seek caused a brief panic in the tech sector. Yesterday, there was another significant market fluctuation, particularly affecting Mexican and Canadian assets, as the “shock” weekend tariffs were postponed by a month.
While trade will continue to be a short-term concern, it’s important not to overlook the tech sector. Alphabet’s disappointing revenue and cloud performance led to a more than 8% drop in its stock price after reporting tonight, with Amazon’s earnings report scheduled for Thursday. Notably, Nvidia fell below last Monday’s levels yesterday, erasing the gains from the bounce that followed their 16.97% drop in a single day. The stock is now down 22% from its all-time high in early January, reaching levels last seen in June last year, indicating a loss of momentum. Therefore, monitoring the tech sector is crucial as the trade war escalates.
Despite this, the trade issue remains at the forefront as US tariffs of 10% on all Chinese goods came into effect this morning, prompting retaliatory tariffs from China on US energy, agricultural products, and auto vehicles ranging from 10-15%. While the market largely perceived China’s response as mild, this is just the beginning of the latest trade war exchange.
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