Since the customs hammer of US President Donald Trump last Wednesday on the “Liberation Day”, the stock markets in the world in the world are breaking. The price profits of one year are practically destroyed. How far go on your knees? RBI Chief -Gastriten Gunter Deuber warns: “Everything can get worse.”
In the late fall, Deuber has already recommended to switch shares of shares in other asset classes such as bonds. His assessment can be described as prophetic at the time. And now? Deuber: “We are currently dealing with market movements such as when the COVID Pandemic outbreaks or in the global financial crisis. At that time, the shocks at the fairs were only stopped by international political coordination, for example by the central banks, for example, have no coordination. A recovery from the stock market markets.
There is further downward potential
In addition: “The evaluation of the US shares with a view to the price profit ratio is still high, higher than before the COVID crisis. There is therefore more downward potential for the assessment levels.” In between, the courses can also rise somewhat as a correction, but if the profit perspectives of the companies fall, fall again.
The only solution would be “that Trump will be involved in sensible negotiations with Europe and China and exposes the rate for 60 or 90 days. It does nothing if he does a deal with small countries, even if it is happy. The solution is to the table: one person can fall back,” says Deuber.
In the meantime, however, the trade war will probably escalate: China Schines will be ready to show hardness to the US. Deuber: “With counter ariffs, export restrictions for rare earths that the American economy urgently needs, and by excluding American companies from cooperation with Chinese companies. China has many other options for the counter -reaction, apart from rates.” Moreover, China is a state -oriented and well -managed economy, “that will remain difficult. And as long as there are no signs of coordination, worry will remain on the stock markets.”
But aren’t the crashes of the stock fairs a bit excessive? After all, only three percent of EU production goes to the United States and the largest Chinese companies mentioned also earn only two percent of sales with the United States. The crashes are very logical: “First of all, America still stands for almost the same share in world trade as China and the EU and is very important. It is also not only about direct exports of individual countries to the American excesses rational.”
No coordination of the central banks
Deuber also does not believe that this time the central banks in the world will work coordinated. Because why the European ECB would respond if there is a recession in America.
And such a recession is actually on the rise. The consequences for the stock markets? Deuber: “There can also be a bear market where the courses at a lower level go sideways for six to nine months.”
The profit of companies in Europe is also under pressure: “Now every company will no longer try to put it in the United States in the rest of the world. The result would be a price competition – and decreasing profit from companies.”
Deuber believes that all of this will hardly impress. Recently many people in the field of the US president would have benefited from the stock market crash. Deuber: “I would not exclude that someone from their private environment, for example in the family and acquaintances, speculated about price losses.”
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
