Investors have not taken President Donald Trump in the word, and now the markets are sold in response to his decision to impose heavy prices in Canada, Mexico and China.
The term contracts on NASDAQ 100 (NQ = F) plunged more than 1.7%, leading to the decline among the three main indices, but the rescue losses were written earlier in the morning. The term contracts on S&P 500 (ES = F) have evolved approximately 1.5%, and the term contracts attached to the industrial average of Dow Jones (YM = F) gave approximately 1.3%, or about 580 points .
“Although we have not baked prices in our own market perspectives in American actions, we fear that many participants in the financial markets have underestimated the risk that they are more than a negotiation tool”, said the American capital market strategy of RBC Lori Calvasina wrote in a note to customers on Sunday.
While Trump was clear since the first day in power that he would have slapped 25% of prices in Canada and Mexico, the markets and economists seemed not to take the president at his nominal value. The White House also said on Friday that the administration planned to promulgate a 10% rate on China.
“My meaning is that the prices are coming, but I don’t think they will be on the same scale that the president spoke,” said the addition of chief economist of the capital economy group on Thursday , for obvious reasons, and it is that it would land the market. “”
Even Paris markets, which Many believe they are a leading indicator in the recent presidential electionWere no prices in high prices. As of January 29, Polymarket, a popular online Paris offer, was the price in just 20% dimensions That Trump imposed 25% of prices in Canada and Mexico.
Now it seems that market consensus has been offside and that investors are faced with repair of potential risks. The US dollar has climbed up to 109, almost its highest level in two years. The retail and cars that could be affected by the rates also sold.
“Complete complete prices with the stay do not seem to be in the price of key markets,” a team of Morgan Stanley Equity’s strategists and economists wrote on Sunday.
They added: “American actions can undergo pressure and services should surpass consumer goods.”
To be clear, there is always a path so that the widespread prices do not really hold. The functions of the three countries will be in force before Tuesday, February 4 and the negotiations under way between countries could continue.
But even again, the pricing surprise of the weekend for the markets could be an early overview of the state of the short-term markets while investors continue to decipher Trump’s trade policy.
