The Long Investor
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HSI
🕑 Added 2025-04-07 10:26:18 +0000 UTCHSI had a large drop today of -13% which is the largest drop since 2008.
This is typically not a good signal for the US market and we are seeing the impact in the US PM now.
The trade war right now is primarily between the US and China and up until today, most of the damage was done to the US market while the HSI was holding very well.
But there are no winners in such a trade war, if Trump decided to use exact reciprocal tariffs then the market would digest this information as fair but instead he used his own formula which involves a trade deficit and came up with a completely ridiculous demand that left China in no other position but to retaliate with the same amount of tax.
Both markets do not like it, in comparison the US loses far more, the taxes lost on capital gains alone will be damaging to the the US.
China has already stated this morning that they will ramp up QE now, which is something the US can not do or this will send Yields higher again.
China has the advantage here right now and announcing another stimulus package would help their market and put even more pressure on the US.
Comments
G4Golf
Good point about tax revenues. Whilst all the talk is about billions of $ from tariffs (to possibly fund tax cuts), the effect of reduced demand, reduced earnings, reduced cap gains, et al, could actually reduce total fiscal revenues. Same effect as increasing spending, and hence the deficit?
aartt v
According to the official 2025 public holiday calendar of the People's Republic of China, this holiday was observed from April 4 to April 6 (Friday, Saturday, and Sunday). Financial markets, such as the Shanghai and Shenzhen Stock Exchanges, traditionally do not operate on official public holidays. Therefore, the markets were closed on April 4, 5, and 6, 2025.
