Last week, global stock markets fell sharply due to rising fears of a potential trade war between the United States and China. This shift towards a risk-averse attitude led to increased interest in bonds, especially foreign bonds, which provided the only positive returns among the major asset classes over the week, according to various exchange-traded products.
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Taiwan sends jets to shadow China’s air force drills near the island: Reuters
US Treasury Secretary seeks ways to mitigate US-China trade risks: Bloomberg
European Union’s competition minister considers breaking up Google: Telegraph
World stocks rise on Monday following reports of US-China trade negotiations: Reuters
San Francisco Fed Chief may become the next leader at NY Fed: WSJ
US and South Korea agree to revise their trade agreement: Bloomberg
US durable goods orders see a notable rebound in February: MarketWatch
S&P 500 Index closes just above the widely tracked 200-day average:
Meltdown: Why Our Systems Fail and What We Can Do About It
By Chris Clearfield and Andras Tilcsik
Excerpt via Big Think
Although we cannot revert to simpler times, airlines should not return to paper tickets, nor should traders abandon technology. Instead, we must learn to manage these advanced systems effectively. Fortunately, emerging research illustrates how to navigate these complexities.
The first crucial step is acknowledging that the landscape has fundamentally changed. This can be surprisingly challenging, even in an era where businesses rave about advancements like blockchain and AI. One former CEO of Knight Capital, reflecting years after their technological collapse, expressed, “We weren’t a technology company; we were a broker that used technology.” Historically, viewing technology merely as a supporting element rather than core to the business model was acceptable, but that perspective is outdated now.
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Concerns about a global trade war have sent stock markets into a frenzy following President Trump’s decision to impose tariffs on China last Thursday. China’s Ministry of Commerce quickly retaliated with its own tariffs on US imports. Should these trade restrictions continue to escalate, there could be detrimental effects on economic growth, making it vital to monitor this evolving situation closely. Despite this, current data suggests that the risk of a US recession remains almost non-existent.
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US foreign policy takes a hawkish turn with Bolton’s appointment: Atlantic
Trump implements new China tariffs, triggering a tumble in stocks due to trade war fears: Reuters
China threatens retaliatory tariffs against the US: WaPo
Senate passes a $1.3 trillion spending bill, preventing a government shutdown: Bloomberg
US Leading Economic Index rises 0.6% in February, marking the fourth consecutive increase: CNBC
US jobless claims increase slightly but remain at the lowest levels since 1970: MarketWatch
US Composite PMI for February indicates moderate GDP growth of 2.5% for Q1: IHS Markit
FHFA Index shows US house prices rising 7.3% year over year in January: Builder
Manufacturing remains robust in the Fed’s 10th district: Wichita Business Journal
S&P 500 Index fell 2.5% on Thursday, reaching its lowest point since February 9:
Federal Reserve Chairman Jerome Powell, during his first official press conference as the leader of the central bank, announced an increase in interest rates. This tightening of monetary policy was anticipated; however, Powell’s remarks regarding the use of the Treasury yield curve as a predictive tool for forecasting the next US recession took many by surprise.
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Congress unveils a $1.3 trillion budget that will keep the government funded until September: CNN
Trump presses forward with tariffs on China, escalating trade war risks: LA Times
Identifying the most vulnerable US sectors in a potential trade war with China: Bloomberg
Federal Reserve raises the target interest rate to a range of 1.5%-to-1.75%: CNBC
Fed raises its GDP growth projections for 2018 to 2.7% and 2.4% for 2019: Fed Reserve
Chinese media suggests readiness for military action over Taiwan: Reuters
Over 40 African nations sign a free-trade agreement: NY Times
Existing US home sales increased by 3% in February: USA Today
US current account deficit widens more than anticipated in Q4: Reuters
S&P 500 dips to its lowest closing since March 2 following the Fed rate hike:
Intech Investment Management recently released a guide focused on assessing market stress using various risk metrics, such as the skewness of returns (SoR). While SoR is often overlooked when evaluating risk, Intech argues for its significance and encourages closer examination of this data.
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South Korea’s president suggests potential trilateral talks with North Korea and the US: CNN
Trump administration may expel Russian diplomats in response to the UK poisoning incident: CNN
Congress faces delays on spending bill, heightening the risk of a government shutdown: The Hill
Trump expected to announce new tariffs and restrictions on China this Thursday: MarketWatch
A potential trade war with China could inflict damage but not necessarily trigger a recession: Bloomberg
Key factors to observe in today’s Federal Reserve policy announcement: NY Times
The G20 meeting is focused on trade disruptions as a risk to global growth: Reuters
Eurozone consumer confidence for March remains steady: Reuters
Two-year Treasury yield rises to 2.34%, the highest level in 10 years, ahead of the Fed meeting:
According to estimates by The Capital Spectator, US economic growth for the first quarter is projected to match the modest pace observed in Q4 of the previous year. The median forecast suggests a 2.5% increase in output, reflecting the same gain recorded in the last quarter of 2017, as stated by the Bureau of Economic Analysis.
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### Conclusion
The past week has witnessed significant volatility in global markets, predominantly driven by fears of escalating trade tensions between the United States and China. These developments have led to a flight towards safer assets such as bonds. Stakeholders are advised to remain vigilant as these economic narratives evolve, impacting both market stability and future forecasts.
