May: It was a total of 102 words that erased about $1.36 trillion from the global stocks this week.
Equity markets across the world were roiled by President Donald Trump's tweets on Sunday that he would boost tariffs on Chinese goods. Not only did they spark losses, but volatility came roaring back with a vengeance, with the Cboe Volatility Index rising 50 per cent in two days to breach 20 for the first time since January.
Risks surrounding US-China trade relations -- which were not on investors' radar as late as last week—came flooding back. Markets had been lulled into a state of complacency in recent weeks as confidence grew the trade discussions were going well, major central banks were dovish and US corporate earnings were coming in better-than-expected.
"The latest shift adds a new dimension of uncertainty to what most market participants were assuming was a done deal," said Eleanor Creagh, Sydney-based Australia Market Strategist at Saxo Capital Markets. "Something shifted over the weekend, and it could be wishful thinking to keep drinking from the glass half full."...