As in the game of yo-yo, with the string that rolls up and unrolls, so the stock and bond markets which had suffered huge losses, are rebounding vigorously and panic has given way to euphoria after Trump last night, with US markets still open, he announced the suspension for 90 days of most of the new US tariffs imposed just 24 hours earlier, except China. The move was strong on Wall Street last night and Asian stocks are also shining today, while European stock market futures are pointing to a sharply higher opening. However, US futures and the dollar are lagging behind in this move, suggesting some cracks in investor confidence in the US economy. Gold, meanwhile, continues to rise after the deep market turmoil we have seen in recent sessions. It is now less than $40 an ounce from its recent record. Prices have risen by an impressive 3% so far, in line with the strongest growth since November.
Trump: All stopped for 90 days. But for China the duties rise to 125%
Last night, with U.S. markets open, Trump announced that he would suspend many of his new tariffs for 90 days, but would further increase them on imports from China from 104% to 125%. His sudden change of direction came less than 24 hours after he took effect with steep new tariffs on imports from dozens of trading partners. At the same time, he said he would lower them for other countries as well.
Wall Street bounces with all its Magnificent Seven
Wall Street indexes recorded overnight the biggest daily percentage gains in more than a decade its best session since 2008, with investors relieved that with Trump's latest U-turn, global trade would at least no longer be set to grind to a complete halt. The S&P 500 index closed up 9,5%, a leap that took it out of bear market territory. The Magnificent Seven index rose 14,40% as stocks amassed a market value of more than $1,5 trillion. The gains didn’t erase all of the $3,4 trillion in value that companies have collectively lost since peaking in late 2024; about $2 trillion of those losses occurred last week, after Trump imposed tariffs. But the reprieve has given investors a reason to buy back into these expensive stocks, whose valuations had soared as companies invested billions of dollars in developing artificial intelligence infrastructure. Shares of the AI chip giant Nvidia together with Apple, Tesla, Microsoft, Alfabet, Meta (Facebook) and Amazon closed higher between 9,68% and 22,69%, a rally that pushed the Nasdaq to close up more than 12%.
US bond markets also stabilize
A frenzied bond sell-off that had been seen yesterday, rekindling fears of fragility in the world's largest bond market, has also stabilized. Last night's auction of 10-year T-bonds also closed successfully, while the 3-year one the day before had been disappointing.
The White House's change of direction came after the excellent outcome of the auction of 39 billion dollars in ten-year Treasury bonds" observes Antonio Cesarano, the chief global strategist of Intermonte, who points out that those who subscribed to the United States debt were mainly foreign institutional entities, perhaps in response to a call for mobilization that came from Washington a few hours after the disastrous outcome of yesterday's auction of three-year bonds. It is possible, according to Cesarano, that Trump decided to stop the escalation after obtaining from partner countries a concrete response on a topic that has been reiterated several times in recent weeks, that of debt. Both Trump and the Secretary of the Treasury, Scott Besent, have long been calling for partner countries to buy more US goods and, above all, more Treasuries. The call has been answered and negotiations can begin. Yesterday, Treasury bonds have never fluctuated so violently, with 2- and 30-year yields fluctuating by more than 0,3 percentage points on Monday and Wednesday. The two bonds have not recorded such extreme movements at the same time since statistics began to be recorded in 1998.
Taiwan holds a huge share of U.S. assets and takes every opportunity to remind investors (and America) of it. The island’s central bank governor, Yang Chin-long, just told lawmakers that more than 80% of its foreign reserves are in U.S. Treasuries, calling that an ideal level. (Taiwan had nearly $580 billion in foreign reserves as of March.)
Asian stocks recover, US-China relations worry
Euphoria is also felt in Asia. The MSCI Asia Pacific index is up 5,2%, its strongest positive change since November 2022. The Tokyo stock exchange is up 8,5%. The yen is weakening to 146,7 against the dollar. The Chinese stocks opened on a positive note on Thursday and the Hang Seng Index Hong Kong jumped up to 4%, the CSI 300 of stocks Shanghai and Shenzhen +1%, despite the yuan onshore has fallen to its lowest level in 17 years. Some analysts have attributed the rally to hopes for talks between the world’s two largest economies, as well as Beijing’s support for markets and the economy.
However, one looks with concern at the open war between the US and China: Trump has dealt a blow to Beijing by raising the tax on Chinese imports to 125%, up from the 104% tariff that went into effect on Wednesday. China has increased additional tariffs on American products to 84% and imposed restrictions on 18 US companies starting today, April 10. In Beijing, China's political and business leaders are expected to meet soon to discuss further economic stimulus, after US President Donald Trump's tariff hike, he writes Bloomberg. The meeting will focus on measures to support housing, consumer spending and technology innovation. Other government bodies, including financial regulators, will also attend the summit. China is letting the yuan depreciate as a safety valve for the broader economy. That makes its goods cheaper, but it increases the cost of imported raw materials. And any sharp decline in the currency could cause problems for other emerging markets, many of which are already struggling with an influx of cheap Chinese goods. The offshore yuan was down 0,2% at 7,3585 against the dollar, holding losses as new cumulative U.S. tariffs of 125% on China take effect.
In contrast, the Vietnam said today it had reached an agreement with the United States to start negotiations on a trade pact. Vietnamese shares soared in morning trading after Donald Trump suspended 46% tariffs. The VN index was up 6,7% as of 11:20 a.m. Thursday, its highest since October 2001.
European stocks: 8% rebound in sight
European stock market futures anticipate an 8% rebound after Trump's move.
Ps. The current worsening macroeconomic scenario makes the contraindications of the offer launched by MPS on Mediobanca even more evident, according to the CEO of Piazzetta Cuccia, Alberto Nagel.
Meanwhile, Barclays has raised its target price on Generali, of which Mediobanca holds 13,1%, from 24 to 25 euros (underweight rating), and JP Morgan and BlackRock have reduced their respective stakes in Banco Bpm to 2,093% starting from April 2, from a previous stake of 3,057%, according to a communication from Consob.
Eni Investors interested in buying a minority stake in renewable energy and retail subsidiary Plenitude are expected to value the company at more than €10 billion, including debt, said Francesco Gattei, the group's chief transition and financial officer.
stmThe French members of the supervisory board voted in favor of the entry of Marcello Sala, opposed by three independent directors who have the right of veto.
Italgas brings together both the ordinary meeting on the widespread shareholding and stock grant plans and the extraordinary meeting on the capital increase for the acquisition of 2i Rete Gas
