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Trump Threatens Higher Tariffs; Market Tumbles…

On Sunday, the POTUS highlighted a sluggishness in ongoing trade talk with China as a reason for looking to hike tariffs this coming Friday – expected hike would be a 25% from a previous 10% on $200 billion worth of Chinese imported goods. This obviously hasn’t been taking mildly by the market as a risky asset has plunged quite significantly. For instance, as we publish this, current daily price change:

S&P 500: – 1.59% (476 points)

Dow 30: – 1.78% (473 points)

Nasdaq 100: – 2.02% (159 points)

Hong Kong 50: -3.51% (1064 points)

Nikkei 225: -2.13% (479 points)

Trump’s tweets have clearly driven through a wave of ‘risk off’ sentiments across the global markets. Risky assets in effect would look to decline whilst safer assets would most likely appreciate in value.

The good thing about trading in a highly liquid market is that there is no exact direction that’s required to make returns.  A market that is ‘taking a beat’ can be shorted to lock in profits. However, in times like this, there is an increase in market volatility – which is basically a measure of investor’s fear in the market. In that regards, it is advisable that traders employ effective risk, reward strategy.

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