Dow Jones index woes amid renewed trade war

Trump escalates trade war with a new round of tariffs and now China fights back by suspending all agricultural U.S imports. As a result, the dollar takes a dive while the global economy takes a turn for the worse.

Dow Jones index woes amid renewed trade war

The trade war truce apparently wasn’t meant to last as U.S President Trump has slapped China with another round of tariffs. Following the announcement, the Dow Jones Index has dropped by 3% and the outlook is grim for the U.S stock market.

The latest tariffs of 10% duties to be paid on $300 billion Chinese goods to which Beijing will purportedly retaliate with a trading embargo on all agricultural imports from the U.S.

It’s important to note that China is the top export market for U.S hay and soybeans – accounting for more than 18% of all U.S agricultural exports worldwide.


Bad news for U.S farmers

The trade war has hit farmers the most and while 2017 U.S farm exports to China totaled $19 billion, the post-tariffs 2018 revenues were decreased dramatically to $9 billion. The impetus to the renewed tariffs on Chinese imports to the U.S was none other than China’s failure to keep its promise to boost its purchases of U.S farm products.

China’s response, of course, was to block all agricultural imports from the U.S – cutting out the already struggling farmers from one of their largest markets.


Fear and uncertainty for the dollar and global outlook

While Trump has been criticizing China’s monetary policies of deliberately keeping the Yuan weak to gain an edge in exports, his latest announcements have sparked renewed volatility in the global markets sending the dollar on a nosedive. In fact, the DXY index, which tracks the performance of the dollar against that of all other major currencies, has shown a sharp decrease as well, mirroring that of the Dow Jones Index.

Trump may be denying any negative claims to his policies, but the escalating trade war is just starting to take its toll on the U.S economy which has been performing remarkably so far this year.

Tech companies on NASDAQ are also feeling the downwards pressure from the risk-avert investor sentiment with Apple and Nvidia plummeting by 4% and 6% respectively.

The effects of the trade disputes have also reverberated across the financial markets with the FTSE in Europe losing more than 2% of its recent gains and the Stoxx Europe 600 well on its way to its worst performance in more than a decade.

The stock markets in Tokyo and Hong Kong have also slowed down by 2% and with the Yuan forecasted to weaken even further, we can expect further volatility before and if a correction will take place.


Looking towards safe-haven assets

As is always the case when fiat currencies are struggling, Bitcoin enthusiasts rejoice. A sharp 22% increase in BTC/USD – currently trading at 11605.14 shows reinvigorated interest in Bitcoin since the beginning of the month and is proof enough that while major markets battle it out and emerging economies take the hit; investors look to diversify their assets into cryptocurrencies and other safe-haven commodities.

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Recent .

Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!  

Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!   It has been a momentous week for Facebook CEO Mark Zuckerberg who …

Read More →
Big Tech earnings roll in – Huge profits for Google, Microsoft and more! 

Huge profits for Google, Microsoft and more! Major big tech companies have released their quarterly earnings. We look at how some of the world’s biggest businesses performed so far this year!     Google, …

Read More →
MetaTrader 4 vs MetaTrader 5 – which is the better platform?
Bitcoin bounces back: Is buying the dip worth the risk?

Bitcoin bounces back: Is buying the dip worth the risk?  Bitcoin has recovered some of its losses following its fall from a record high of $65,000. Considering the crypto king’s astonishing performance in 2021, should …

Read More →
Oil summit: Waste of time
Oil market outlook: bumpy ride ahead?

2020 has been disastrous for the oil markets, however, it appears that oil has recovered most of its losses and is now hovering near pre-pandemic levels. In today’s article we will take a look at oil’s recent performance and explore the opportunities that may lie ahead.

Read More →
Dollar still on ten month lows while AUD gains
Stock Market Forecast: S&P 500, Dow Jones, NASDAQ Predictions and Analysis for 2021

With 2021 just around the corner, financial analysts are offering their outlook on where the stock market is headed in the coming year — and many of these experts are hoping for a bullish outcome. Read on.

Read More →
MetaTrader 4 vs MetaTrader 5 – which is the better platform?
Bitcoin rollercoaster sees massive highs & lows – Is the crypto bubble set to burst?

Bitcoin hit a high of $42,000 on January 8 only to plunge by nearly 21% on Monday (January 11) to $35,555. Is the cryptocurrency bubble set to burst?

Read More →