After last week’s volatility and big swings, investors were hoping that the next few trading sessions would provide some clarity and smoother waters. Unfortunately, that wasn’t in the cards. If anything, volatility only increased. And the reason was an old foe. The trade war took a nasty turn this week.
Traders had expected that the tariffs and other issues between China and the U.S. would be resolved sooner than later. However, in a bizarre series of tweets, President Trump announced on Friday that the expansion of tariffs/import fees would continue as planned. This caused most of the market to drop heavily. And it kept dropping for the rest of the week.
Relatively muted data and earnings didn’t help the situation as traders had nothing really positive to grasp onto. And with that, investors were in for a rough week.
All in all, many of the market’s previous worries came back with a vengeance and traders were once again on guard that all might not be right in the global economy.
Be sure to check out our previous Wrap here, when the Powell Put was back in place.