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Panic Monday sparks global sell-off

Published

2 months ago

April 7, 2025

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FRANKFURT, April 7, (AP): Global stock markets extended a severe plunge Monday, fueled by fears that U.S. tariffs would lead to a global economic slowdown. European and Asian shares saw dramatic losses, the leading U.S. index flirted with bear market territory in pre-market trading, and oil prices sagged. The massive sell-off in riskier assets at the start of the trading week follows President Donald Trump’s announcement of sharply higher U.S. import taxes and retaliation from China that saw markets fall sharply Thursday and Friday. Tokyo’s Nikkei 225 index lost nearly 8% shortly after the market opened and futures trading for the benchmark was briefly suspended. It closed down 7.8% at 31,136.58. European shares followed Asian markets lower, led by Germany’s DAX index, which briefly fell more than 10% at the open on the Frankfurt exchange, but recovered some ground to move down 5.8% in morning trading.

In Paris, the CAC 40 shed 5.8%, while Britain’s FTSE 100 lost 4.9% in the European morning. U.S. futures signaled further weakness ahead. For the S&P 500, they lost 3.4%, while for the Dow Jones Industrial Average, they shed 3.1%. Futures for the Nasdaq lost 5.3%. If the pre-market futures losses materialize when the U.S. market opens, the S&P 500 will enter bear market territory – defined as a fall of more than 20% from the peak. The index was off 17.4% as of the end of last week. On Friday, the worst market crisis since the COVID-19 pandemic shifted into a higher gear as the S&P 500 plummeted 6% and the Dow plunged 5.5%. The Nasdaq composite dropped 3.8%.

“There’s no sign yet that markets are finding a bottom and beginning to stabilize,” wrote Deutsche Bank analysts in a research note. Late Sunday, Trump reiterated his resolve on his decision to introduce tariffs of 10% to 50% on goods imported into the U.S., a move seen as massively disrupting world trade and supply chains across borders. Speaking to reporters aboard Air Force One, he said he didn’t want global markets to fall, but also that he wasn’t concerned about the massive sell-offs, adding, “sometimes you have to take medicine to fix something.” Heavy selling kicked in after China on Friday matched Trump’s tariff, upping the stakes in a trade war that many fear could end in a global recession.

Even a better-than-expected report on the U.S. job market, usually the economic highlight of each month, wasn’t enough to stop the slide. “The idea that there’s so much uncertainty going forward about how these tariffs are going to play out, that’s what’s really driving this plummet in the stock prices,” said Rintaro Nishimura, an associate at the Asia Group. Chinese markets often don’t follow global trends, but they also tumbled. Hong Kong’s Hang Seng dropped 13.2% to 19,828.30, while the Shanghai Composite index lost 7.3% to 3,096.58. In Taiwan, the Taiex plummeted 9.7%. South Korea’s Kospi lost 5.6% to 2,328.20, while Australia’s S&P/ASX 200 lost 4.2% to 7,343.30, recovering from a loss of more than 6%. Asian economies are heavily exposed to Trump’s tariffs since they are dependent on exports, and a large share go to the United States. “Beyond the market meltdown, the bigger concern is the impact and potential crises for small and trade-dependent economies, so it’s crucial to see whether Trump will reach deals with most countries soon, at least partially,” said Gary Ng of Nataxis. Oil prices also sank further, with U.S. benchmark crude down $2.30 to $59.69 per barrel. Brent crude, the international standard, gave up $2.33 to $63.25 a barrel. As with the larger sell-off, the drop was fueled by fears that the tariffs would slow economic growth. That would hit demand for fuel, and the drop comes after moves to increase production by the OPEC+ producers’ alliance. Exchange rates also gyrated. The U.S. dollar fell to 146.24 Japanese yen from 146.94 yen. The yen is often viewed as a safe haven in times of turmoil.

The euro rose 0.3% to $1.0992. Nathan Thooft, chief investment officer and senior portfolio manager at Manulife Investment Management, said more countries are likely to respond to the U.S. with retaliatory tariffs. Given the large number of countries involved, “it will take a considerable amount of time in our view to work through the various negotiations that are likely to happen.” “Ultimately, our take is market uncertainly and volatility are likely to persist for some time,” he said. The Federal Reserve could cushion the blow of tariffs on the U.S. economy by cutting interest rates. That can encourage companies and households to borrow and spend. But Fed Chair Jerome Powell said Friday that the higher tariffs could drive up expectations for inflation and lower rates could fuel still more price increases. Much will depend on how long Trump’s tariffs stick and how other countries react. Some investors are holding onto hope he will lower the tariffs after negotiating “wins” from other countries. Stuart Kaiser, head of U.S. equity strategy at Citi, wrote in a note to clients that earnings estimates and stock values still don’t reflect the full potential impact of the trade war. “There is ample space to the downside despite the large pullback,” he said.

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Trump and Putin hint at US-Russia trade revival, but business environment remains hostile

Published

19 hours ago

May 31, 2025

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Russian President Vladimir Putin holds a meeting with members of Russia’s business community at the Kremlin in Moscow, Russia on May 26. (AP)

WASHINGTON, May 31, (AP): Hundreds of foreign companies left Russia after the 2022 invasion of Ukraine, including major US firms like Coca-Cola, Nike, Starbucks, ExxonMobil and Ford Motor Co. But after more than three years of war, President Donald Trump has held out the prospect of restoring U.S.-Russia trade if there’s ever a peace settlement.

And Russian President Vladimir Putin has said foreign companies could come back under some circumstances. “Russia wants to do largescale TRADE with the United States when this catastrophic ‘bloodbath’ is over, and I agree,” Trump said in a statement after a phone call with Putin. “There is a tremendous opportunity for Russia to create massive amounts of jobs and wealth. Its potential is UNLIMITED.”

The president then shifted his tone toward Putin after heavy drone and missile attacks on Kyiv, saying Putin “has gone absolutely crazy” and threatening new sanctions. That and recent comments from Putin warning Western companies against reclaiming their former stakes seemed to reflect reality more accurately – that it’s not going to be a smooth process for businesses going back into Russia.

That’s because Russia’s business environment has massively changed since 2022. And not in ways that favor foreign companies. And with Putin escalating attacks and holding on to territory demands Ukraine likely isn’t going to accept, a peace deal seems distant indeed. Here are factors that could deter US companies from ever going back: Russian law classifies Ukraine’s allies as “unfriendly states” and imposes severe restrictions on businesses from more than 50 countries.

Those include limits on withdrawing money and equipment as well as allowing the Russian government to take control of companies deemed important. Foreign owners’ votes on boards of directors can be legally disregarded. Companies that left were required to sell their businesses for 50% or less of their assessed worth, or simply wrote them off while Kremlin-friendly business groups snapped up their assets on the cheap.

Business

Trump tells US steelworkers he’s going to double tariffs on foreign steel to 50%

Published

21 hours ago

May 31, 2025

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US President Donald Trump speaks to reporters in the rain after arriving on Air Force One at Joint Base Andrews, Md on May 30. (AP)

WEST MIFFLIN, Pa, May 31, (AP): US President Donald Trump on Friday told Pennsylvania steelworkers he’s doubling the tariff on steel imports to 50% to protect their industry, a dramatic increase that could further push up prices for a metal used to make housing, autos and other goods. In a post later on his Truth Social platform, he added that aluminum tariffs would also be doubled to 50%. He said both tariff hikes would go into effect Wednesday.

Trump spoke at US Steel’s Mon Valley Works-Irvin Plant in suburban Pittsburgh, where he also discussed a details-to-come deal under which Japan’s Nippon Steel will invest in the iconic American steelmaker. Trump told reporters after he arrived back in Washington that he still has to approve the deal. “I have to approve the final deal with Nippon and we haven’t seen that final deal yet, but they’ve made a very big commitment and it’s a very big investment,” he said.

Though Trump initially vowed to block the Japanese steelmaker’s bid to buy Pittsburgh-based US Steel, he reversed course and announced an agreement last week for “partial ownership” by Nippon. It’s unclear, though, if the deal his administration helped broker has been finalized or how ownership would be structured.

Nippon Steel has never said it is backing off its bid to outright buy and control US Steel as a wholly owned subsidiary, even as it increased the amount of money it promised to invest in US Steel plants and gave guarantees that it wouldn’t lay off workers or close plants as it sought federal approval of the acquisition. “We’re here today to celebrate a blockbuster agreement that will ensure this storied American company stays an American company,” Trump said as he opened an event at one of US Steel’s warehouses.

“You’re going to stay an American company, you know that, right?” As for the tariffs, Trump said doubling the levies on imported steel “will even further secure the steel industry in the US.” But such a dramatic increase could push prices even higher. Steel prices have climbed 16% since Trump became president in mid-January, according to the government’s Producer Price Index.

Business

Kuwait Wins Big at Sharjah Finance Awards

Published

2 days ago

May 29, 2025

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KUWAIT CITY, May 29: The Ministry of Finance said it won the third edition of the Sharjah Award for Public Finance (2024-2025) in recognition of its outstanding role in providing financial services. Representatives of 17 countries vied for the award, the Ministry noted in a press release on Wednesday. Minister of Finance Noura Al- Fassam stated that winning this award reflects the ministry’s efforts in improving the efficiency of financial performance and enhancing the quality of services provided. The ministry confirmed that it is continuing to develop financial services under directives from the Council of Ministers towards digitizing services. The statement added that Al-Fassam received the award on behalf of the ministry, which participated in the digital payment project for government services that enables government entities to purchase online, pay government fees, and meet various needs to fulfill their financial obligations. (KUNA)