The Perfect Storm of the Stock Market III

[Volvobrick]

Dow plunges by more than 1,600 points after China retaliates against Trump’s tariffs

https://www.cnn.com/2025/04/04/investing/stock-market-dow-tariffs

Today seems to be worse than yesterday. Sleeping well since negligible exposure to US market. 

 

[Enye]

Stock market has been going up… everybody think they are stock guru

even my son…now he deflated ego liao 😂

for me…. It’s still bedok reservoir 🥲

btw when is the property market’s turn? 😬

[Wt_know]

  On 4/4/2025 at 2:54 PM, Windwaver said:

They lose big time will tell the world meh? 

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only show good stuff ...  smelly smelly 2X 5X 10X the portfolio ... sup sup sui

 

[inlinesix]

  On 4/4/2025 at 3:22 PM, Enye said:

Stock market has been going up… everybody think they are stock guru

even my son…now he deflated ego liao 😂

for me…. It’s still bedok reservoir 🥲

btw when is the property market’s turn? 😬

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HDB or Private?🤭

[Throttle2]

It’s times like these that forge real investors.  Many of these investors only came on board in the last 5-10yrs.  Other than covid which saw a u-turn return that nobody had expected, these investors have never truly weathered any storms.

the next few business days will see those who leveraged and over invested sell at losses which they may not be able to make back in the short term.

Many people are starting to take reference on the last big trade tariff event almost 100yrs ago.  I think the world today is totally different from what it was back then.  Leaning back on history is just a simplistic way of explaining things.  Things which is unknown to everyone whether you are a hawker , an economics professor, a minister or a big bank CEO, remains, unknown.    

what is known as is how the market reacts in times like these.   And markets will sell down risky assets to hold cash and or deploy into less risky assets.   We need to brace ourselves for volatility most certainly until the final tariffs have been decided or implemented. And even then, we dont know how the final real effects will be.  Therefore, the only thing we can do now is to ensure that we have solid liquidity now and going forward to fight the battle.    These will mean not adding too quickly or too much to even taking some money off the table. 

As Singapore is on the receiving end as it always has been, this could mean more cuts as business continue to operate leaner.  So for those who think that their jobs will last forever or at least till their loans are paid off, this could be another wake up call.

As a long term investor, it is definitely not the time to panic especially if you are well diversified and well allocated.  
Good luck, be vigilant, remain calm, there will always be gems to pluck.

 

 

Edited April 4 by Throttle2

[Windwaver]

  On 4/4/2025 at 3:25 PM, Wt_know said:

only show good stuff ...  smelly smelly 2X 5X 10X the portfolio ... sup sup sui

 

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Seriously, those videos are just click baits. If I know how to make those kind of $$ I go tell the world?

Feel like telling also no time .

When make $$ will tell the world so people will click but lose $$ you know I know. In the end, at most break even or lose slightly, most would have lost to the market anyway.

Frankly, how many retail investors out there really know what they are doing?

[Windwaver]

https://fortune.com/2025/04/04/trump-tariffs-jpmorgan-raises-recession-risk-amid-global-market-rout/

‘There will be blood’: JPMorgan raises recession risk to 60% as global stock market sell off continues

President Donald Trump’s package of tariffs to be levied starting next week could plunge not just the United States into recession but the entire world along with it. 

That’s the simple conclusion reached by the top economic minds at JPMorgan. In a research report published on Thursday titled “There will be Blood”, the Wall Street investment bank argued other global markets would not be resilient enough to escape the gravitational forces of a shrinking U.S. economy weighted down by tariffs.

Revising its 2025 forecasts for the second time in five weeks, JPMorgan said it was caught off guard by the Trump administration’s “extreme” agenda symbolized by the raft of hefty import duties announced during Trump’s so-called ‘Liberation Day.’

As a result of the White House’s attempt to convert its trade deficit into a problem for America’s trading partners, JPMorgan has now ratcheted up the probability of a global recession to 60% from 40% previously.

Yet far from making America wealthy again as Trump has promised, JPMorgan calculates taht the tariffs will cost U.S. consumers roughly $700 billion—a de facto tax hike nearly as painful relative to the size of the economy as Lyndon B. Johnson’s Revenue Act passed to finance America’s war in Vietnam.

“If sustained, this year’s ~22%-point tariff increase would be the largest U.S. tax hike since 1968,” the bank said, estimating its impact at 2.4% of domestic GDP.

The latest actions lift the average tariff rate higher than even those seen during the Smoot-Hawley Tariff Act of 1930, an act that many economists argue played a key role in exacerbating the Great Depression. 

“A strong case can be made that the latest tariffs are more damaging given that the share of imports and broader globalization are considerably larger now than in the 1930s,” JPMorgan continued.

$3 trillion wiped off U.S. equity markets

The Trump administration has argued a healthy manufacturing base is important to national security, worth the short-term pain to claw back heavy industry that was hollowed out over many years and moved offshore. And indeed, the pandemic did reveal globalization had its flaws, as the lack of certain $1 commodity semiconductors made in Taiwan prevented the manufacture of a $40,000 passenger car stateside.

However, due to the dimensions and arbitrary nature of the tariffs—determined not through reciprocal tariff rates but trade imbalances—their imposition risks sparking a retaliatory trade war where other countries erect their own protectionist walls in a tit-for-tat escalation.

Here JPMorgan analysts admit it becomes almost impossible to predict the outcome given the many variables at play. Business sentiment and supply chain disruption could either mitigate or exacerbate the effects of the tariffs. 

As a result, on Thursday the markets suffered their worst day since the COVID outbreak five years ago, with $3 trillion worth of value wiped off U.S. equities.

A key factor could be upcoming negotiations, in which the Trump administration is expected to seek concessions from partners that could reduce the trade deficit in exchange for the U.S. lowering its tariff rates.

Comparative advantage can sometimes trump tariffs

There are some fundamental economic realities that most likely will not change no matter what tariff is charged. 

Take the semiconductor industry as an example. Fabricating chips is a capital-intensive business that requires specialized knowledge, critical mass and economies of scale.

Taiwan didn’t simply become the world’s foundry—it aggressively invested in this specialization. Its grip on third-party chip production makes it a critical partner for the U.S. and acts as a strategic deterrent against Chinese aggression. 

By comparison, U.S. chip companies like AMD that once made their own chips hived off this side of their operations to focus on the more lucrative and less risky design and distribution. So called “fab-less” peers like Nvidia outsourced their production to foreign chip fabs from the very beginning.

JPMorgan raises this issue as a potential stumbling block and source of friction during negotiations, limiting the room for manoever and raising the risk of a protracted trade war.

“Importantly, existing bilateral trade imbalances are linked to comparative advantages that promote efficiencies and are generally independent of barriers to trade,” it said.

[Throttle2]

  On 4/4/2025 at 3:22 PM, Enye said:

Stock market has been going up… everybody think they are stock guru

even my son…now he deflated ego liao 😂

for me…. It’s still bedok reservoir 🥲

btw when is the property market’s turn? 😬

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Properties are largely driven by jobs as they are long term purchases not FMCG nor even Consumer staples. 

COEs would move first before properties although the correlation isnt anything near perfect

[Throttle2]

  On 4/4/2025 at 3:08 PM, Volvobrick said:

Dow plunges by more than 1,600 points after China retaliates against Trump’s tariffs

https://www.cnn.com/2025/04/04/investing/stock-market-dow-tariffs

Today seems to be worse than yesterday. Sleeping well since negligible exposure to US market. 

 

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As always, and in this clear instance, the US markets will be the one that moves first, but as this concerns much more than US, the other major markets and Singapore will move accordingly in the early stages until clarity seeps in.  and unless you are very heavy US and Global equities, the impact shouldnt be crippling.  however if this drags, the volatility will hit all markets, Singapore inclusive.

[Windwaver]

Non FI

https://financialpost.com/pmn/business-pmn/nasdaq-100-races-into-bear-market-as-trump-tariffs-spark-rout

Nasdaq 100 Races Into Bear Market as Trump Tariffs Spark Rout

The Nasdaq 100 plunged toward a bear market as its losses from a February high surged past 20% as investors ditch once high-flying tech shares in a broard market rout.

(Bloomberg) — The Nasdaq 100 plunged toward a bear market as its losses from a February high surged past 20% as investors ditch once high-flying tech shares in a broard market rout.

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The six-week selloff has wiped out nearly $6 trillion from the tech-heavy benchmark since its peak, spurred by worries President Donald Trump’s tariffs will push the US economy into recession. The market value destruction has been biggest in the likes of Apple Inc. and Nvidia Corp., companies whose worth swelled past $3 trillion on optimism about artificial intelligence. At this rate, there will be no $3 trillion companies.

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Over the slide, chipmakers Broadcom Inc. and Micron Technology Inc. sank at least 33%, while popular AI plays like Marvell Technology Inc. and Constellation Energy plunged at least 45%. Bloomberg’s Magnificent 7 index is off 24%, while LuluLemon Athletica Inc. and AirBnB Inc. have tumbled at least 30%.

For all the selling, though, the Nasdaq 100 has still delivered annual gains of 20% for the past five years through Thursday, an advance that prompted warnings that a bubble was inflating. Even with the 20% pullback, the index’s components remain expensive relative to history, with a price-to-earnings ratio still above the average over the past two decades. For bulls, that’s a worrisome sign if a recession is in the offing.

“The drop feels awful, but we’ve only given back a percentage of a spectacular long-term rally and haven’t seen a true capitulation, so it isn’t out of the realm that we give back more,” said Steve Sosnick, chief strategist at Interactive Brokers Group in Greenwich. “There is going to come a point where big tech becomes a good value again, but I don’t know we’re there yet.” 

Recent losses came after the Trump administration announced tariff policies that were seen as “a worst-case scenario for tech,” especially given the high exposure that companies like Apple have to countries like China as a manufacturing hub. The Nasdaq 100 sank 5.4% on Thursday, its biggest one-day drop since September 2022. Further selling came after China retaliated against those tariffs on Friday.

The selloff represents the biggest slump for the Nasdaq 100 since 2022, a year that saw the benchmark decline 33% amid slowing economic growth and shrinking profits. The release of OpenAI’s ChatGPT in late 2022 dragged the index out of the slump amid euphoria about the potential for the new technology. The Nasdaq 100 would go on to double in a little more than two years led by Nvidia and other Big Tech stocks as investors bet that heavy spending on AI would yield big profits.

During that time, Big Tech took on characteristics of defensive stocks, owing to rock-solid balance sheets and steady cash flows. The latest drawdown has robbed them of that status, as investors sell near-term winners and seek shelter in Treasuries or more traditional equity-market defensive sectors — leaving tech investors wondering when the slide will present a buying opportunity.

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“They have great cash flow and are great businesses, but the news flow is incredibly tricky,” Sosnick said. “Just as it was a fool’s errand to fight the move higher in the Magnificent Seven, if you’re looking to buy now you’re potentially standing in the way of a global tide that’s now moving in the other direction.”

Adding to the difficult calculus is the cost of AI. Big Tech has poured billions into building out infrastructure and investing in research, but profits have yet to follow. And with growth in the group’s earnings expected to slow, investors are questioning when the hundreds of billions of dollars spent on AI computing gear will pay off.

The index took 32 sessions to fall 20%. If it closes below that level, that will mark the third-fastest drop into a bear market since 2000. The Nasdaq 100’s price-to-earnings ratio has fallen to 30 times from 38 times in February, compared with an average over the past two decades of 25, according to data compiled by Bloomberg. 

“It is a time to be cautious,” said Mark Grant, chief global strategist at Colliers Securities. “Tech valuations had gotten way too high, and while they’re coming down, I think they will continue to get hit.”

[Wt_know]

when F&G hit “0” means what ar?

no one buying, no one selling? lol

Edited April 4 by Wt_know

[Lala81]

More pain. 

[Ginyu]

  On 4/4/2025 at 3:22 PM, Enye said:

Stock market has been going up… everybody think they are stock guru

even my son…now he deflated ego liao 😂

for me…. It’s still bedok reservoir 🥲

btw when is the property market’s turn? 😬

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Also waiting for property market reaction to liberation day🤣 

Edited April 5 by Ginyu

[Voodooman]

  On 4/4/2025 at 3:08 PM, Volvobrick said:

Dow plunges by more than 1,600 points after China retaliates against Trump’s tariffs

https://www.cnn.com/2025/04/04/investing/stock-market-dow-tariffs

Today seems to be worse than yesterday. Sleeping well since negligible exposure to US market. 

 

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Well. Hope we can all weather this storm and make some money from this Trump induced market meltdown, we had some time to prepare and position the portfolio for it. 

Edited April 5 by Voodooman

[Windwaver]

https://www.coindesk.com/policy/2025/04/04/u-s-sec-staff-clarifies-that-most-crypto-stablecoins-aren-t-securities

U.S. SEC Staff Clarifies That Some Crypto Stablecoins Aren't Securities

In its latest what's-not-a-security statement on digital assets, the Securities and Exchange Commission has added dollar-based stablecoins, but may snub Tether.

• The U.S. Securities and Exchange Commission has added to its roster of crypto non-securities with a new statement that argues that most stablecoins belong outside its jurisdiction.
• Its relatively narrow definition of what's covered in the statement may not include Tether's offering, the most popular globally.
• The stablecoin statement joins similar recently announcements on the SEC's memecoin and crypto mining stances.

The U.S. Securities and Exchange Commission has no business with certain stablecoins or their issuers, the regulator's staff declared in the latest statement outlining the corners of the crypto sector for which it doesn't have a legal interest.

Since the agency was taken over by President Donald Trump-appointed leadership and formed a Crypto Task Force to ease pressures on the digital assets space, its staff has issued a series of statements meant to clarify the crypto areas outside its jurisdiction — so far including memecoins and proof-of-work crypto mining. It's now added certain stablecoins to that list. The SEC's Division of Corporation Finance issued the Friday statement — not yet a binding rule, or even formal guidance — to declare such stablecoins "do not involve the offer and sale of securities."

"Persons involved in the process of 'minting' (or creating) and redeeming Covered Stablecoins do not need to register those transactions with the Commission under the Securities Act or fall within one of the Securities Act’s exemptions from registration," according to the statement.

It went on to clarify that such stablecoins — an arena dominated by Tether's USDT and Circle's USDC — "are marketed solely for use in commerce, as a means of making payments, transmitting money, and/or storing value, and not as investments."

However, the stablecoins covered by this statement may not include Tether's, because one of the footnotes says acceptable reserves "do not include precious metals or other crypto assets," both of which are included in Tether's reserves. And the statement says any tokens must be redeemable at any time for dollars, but Tether's terms of service suggest minimum amounts or delays may be imposed.

Circle President Heath Tarbert posted a social-media comment that included a jab toward its competitors.

"The SEC just drew a clear line: Stablecoins backed one-for-one with high quality liquid assets —l ike USDC — are NOT securities," Tarbert said. "This certainty does not extend to other digital assets just because they call themselves 'stablecoins.'"

Congress has been moving forward on establishing a new set of U.S. standards for the issuance of such tokens. This week, the House Financial Services Committee advanced a stablecoin bill toward a vote of the overall House of Representatives. The Senate is building toward consideration of a similar bill that's also been approved by committee there — in both cases by a wide, bipartisan vote.

While they're the most sedate of crypto assets, stablecoins have been a colorful political topic in recent weeks, as the Trump-backed World Liberty Financial pitched its own stablecoin, and some congressional Democrats are concerned that Elon Musk will leverage his status as a tech giant to follow suit.

SEC Commissioner Hester Peirce, who is leading the agency's task force, has said she feels the early, nonbinding moves to reverse crypto resistance at the SEC are important and should be done as rapidly as possible, even if they're not yet official policy. She's said non-fungible tokens (NFTS) may also be considered for such a statement.

[Lala81]

  On 4/5/2025 at 1:22 AM, Voodooman said:

Well. Hope we can all weather this storm and make some money from this Trump induced market meltdown, we had some time to prepare and position the portfolio for it. 

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Haha I just didnt buy much in the last few months. Since I'm just mostly a HODL person. Not really positioned.

Just wait and watch for the meantime. Wait for blue chips to be cheaper. 

Rough waters ahead. 

Edited April 5 by Lala81

[Voodooman]

  On 4/4/2025 at 9:39 PM, Wt_know said:

when F&G hit “0” means what ar?

no one buying, no one selling? lol

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The scary part is Nasdaq PE is now at 29x, even after recent correction.

Even if it were to drop by 50% (haven't talk about impact on E from deglobalization and a global recession), it will still be more expensive than Hang Seng index, which has a PE of 12. Will the ample liquidity save the market? Fed will need to save Wall Street again.

[Enye]

Actually I was quite lucky to reallocate a big chunk into bonds in end March just before this correction

lucky because I was preparing my portfolio to transit to retirement passive income generation and not because I could predict the market

😬😅