Saxo Market Call
Market melts down as recession risks go global
Apr 4, 2025
A historic plunge in U.S. markets follows the announcement of tariffs that heighten recession fears. The discussion dives into how companies like Nike and major tech giants are grappling with these supply chain challenges. Meanwhile, a strong euro complicates Europe's economic landscape as OPEC+ influences crude oil prices. The precious metals market, particularly silver, experiences significant shifts, prompting insights into gold's long-term prospects. Employment data hints at potential slowdowns, while geopolitical tensions add to the market's uncertainties.
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Quick takeaways
- The U.S. equity market suffered significant losses due to the introduction of tariffs, leading to escalated recession fears and expectations for interest rate cuts.
- European stocks are showing increased vulnerability to tariff impacts, complicating growth forecasts as companies grapple with supply chain disruptions and reduced consumption.
Deep dives
Market Reactions to Tariff Announcements
The U.S. equity market faced significant turmoil following the announcement of Liberation Day tariffs, resulting in one of the worst trading days since the pandemic-triggered market panic in 2020. The Nasdaq fell over 1,000 points, while major companies like Nike and Dell experienced steep declines of 14% and 19%, respectively, primarily due to their heavy reliance on affected supply chains. The escalation of tariffs has heightened recession fears, prompting market expectations of a potential 100 basis points cut in interest rates by the Federal Reserve by the end of the year. This shift in sentiment is reflected in the broader bond market, where U.K. and Japanese yields fell sharply in response to the growing recession risks.
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