The $1.89% drop in the $.IXIC(.IXIC)$ on January 7, 2025, is not dramatic in terms of decline alone, but it was the largest "volume selloff" in history and did not have earnings events such as $Apple(AAPL)$ $NVIDIA(NVDA)$
More than the Covid-19 outbreak
More than the 2016 index meltdown period
More than anyday of 2008 financial crisis ......
After all, quantitatively led market, turnover has long been than in previous years to enhance a number of classes, at the same time the index in the history of new highs, leading the market capitalization to reach new highs, the market trading is already active.
But the question is, will the January 7 volume selloff become a "bull and bear turning point"?
In a word - It all depends on Trump!
First of all, although it's already version 2.0, the market still underestimated his "unorthodox behavior", which caused the selloff, including but not limited to the following comments and actions in his press conference
Foreign territory related comments:
Panama Canal & Greenland : Trump has refused to rule out using military force to take control of the Panama Canal and Greenland, saying that the Panama Canal is vital to the U.S. He has also cited national security as a reason for saying that Greenland is needed, and has even threatened to impose high tariffs on Denmark (to which Greenland belongs), predicting that the people of Greenland would welcome his plans.His eldest son, Donald Trump Jr. is on Greenland, adding to speculation about his intentions.
Canada: has talked repeatedly about making Canada the 51st state of the U.S., threatening to use "economic force" although stating that he will not use military force to annex, citing the U.S.-Canada trade deficit, and has also mentioned the reimposition of high tariffs on Canada and Mexico as well as renaming the Gulf of Mexico as the Gulf of the United States.
Criticism of Biden's policies
Complained that Biden is undermining his transition of power, and took particular aim at Biden's move this week to ban offshore energy drilling in some 625 million acres of federal waters, saying that the decision would be immediately overturned and legal action taken.
Attitude on the Gaza hostage issue
set clear expectations for a deal to release the 100 hostages still held in Gaza to be finalized before his inauguration or "the Middle East will descend into chaos."Its special envoy to the Middle East, Steve Witkoff, traveled to Qatar this week for further talks, saying that real progress had been made in the negotiations while noting that Hamas's negotiating position had been weakened, and also emphasizing that Trump's return was changing the dynamics of the hostage-rescue talks.
Criticism of Carter
Criticized Carter's signing of the 1977 treaty returning control of the Panama Canal to Panama during the transportation of Carter's body to Washington, D.C., in preparation for a state funeral, calling the transfer a "disgrace" for $1, and disregarding traditional protocol in this instance, despite previous expressions of gratitude for Carter's passing.
Energy policy related
Vows to expand offshore drilling and energy exploration while promising to lift restrictions on gas heaters, claiming that Biden wants to make all gas heaters in people's homes obsolete when he believes gas heating is cheaper and more effective.
The market's reaction may just be pre-emptive risk aversion, because the market is afraid of increased policy uncertainty, not the policy itself.
The Impact of Trump's Remarks
Altering longstanding diplomatic relations
Territorial rhetoric can severely impact U.S. relations with allies.Threatening remarks against traditional allies such as Denmark (Greenland) and Canada may lead to the erosion of allies' trust in the United States and undermine the existing diplomatic pattern and cooperation mechanism.
Although the Middle East issue is not the most urgent, his tough attitude and involvement in the hostage issue may further complicate the situation.On the one hand, his threats may prompt the parties to speed up the negotiation process, but on the other hand, if not handled properly, they may trigger a larger-scale conflict between Israel and Hamas, further undermining peace and stability in the Middle East.
Domestic Politics
Trump's criticism of Biden's policies and complaints about the transition of power reflect the divisions and partisan tensions in U.S. domestic politics.Although Trump holds the strongest government since Reagan, it does not mean that all government agencies can operate fully and effectively, in addition, the public's trust in the government will also be affected.
Shake-up of the global economic order
The Trump administration's repudiation of the existing system of international rules, especially its withdrawal from multilateral trade agreements, could weaken the U.S. leadership in the global economy.Many analysts believe that this trend of counter-globalization will not only harm the United States' own interests, but may also lead to a reshuffling of the global economic structure, thus triggering broader instability.
Comments