On Tuesday, equity markets across the globe jumped at the news that the Trump administration would delay some of the new tariffs on China it had announced earlier this month. But just one day later, global stock markets sold off hard due to ever-weakening economic data in Europe and Asia and further yield curve inversions.
Call it a major hangover. The reversal in tariffs did not come from a position of strength. It came as a result of global economic reality sinking in and crushing US markets.
Turns out trade wars are not easy to win and the global growth picture is not looking good. Last week, the UK announced negative GDP growth for the past quarter. This week, it’s Germany announcing shrinking GDP with its 10-year bond hitting a record negative 0.62% yield. Then there’s Europe seeing negative industrial production, and China announcing its lowest industrial production growth in 17 years.
