$1 Trillion wiped out as massive trade war between USA and China causes markets to crash
Generally speaking, most stock market corrections are normal.
Markets get heated up on their own momentum and look for a breather to cool down.
However, the present savage correction in the markets is caused by a vicious trade war between two of the greatest economies of the World, namely USA and China.
So far, the trade war has had draconian ramifications over the stock markets.
(Image credit: South China Post)
According to Bloomberg, a colossal sum of $1 Trillion has disappeared into thin air owing to the great crash.
Some experts are hopeful that a compromise may be around the corner and the damage may be contained.
“In these types of situations, the initial messaging can be quite protectionist in nature. After the fact, more frequently than not, President Trump has managed to make concessions that have alleviated some of these concerns. We would expect — the first reaction notwithstanding — that there will be discussions that will moderate the outcome,” Daniela Mardarovici, a portfolio manager said.
A similar view was expressed by Matt Maley, an equity strategist.
“Although Trump might not get us into a full-blown trade war, it sure seems like he is intent on changing the situation in a significant way. Therefore, we think those who say it will be a non-event…are on shaky ground,” he said.
However, some experts warned that the situation is likely to drag on for several weeks at least.
“Trade and tariffs will be an issue for at least the coming weeks, if not months. The ability for this to spiral doesn’t seem high but it is a growing possibility, especially with Gary Cohn’s resignation. In our view, the domestic & global rhetoric and repercussions spurred from tariff talk and Cohn’s departure will likely weigh on the market in the near-term and keep a bid to volatility,” Chris Harvey, head of equity strategy at Wells Fargo Securities, warned.
#CNBCTV18Market | SGX NIFTY SLIPS BELOW 10,000.
Japan’s Nikkei Slumps Over 800 Points; China unveils a list of more than 100 U.S. products as potential retaliation targets pic.twitter.com/8fTIG1hXkf— CNBC-TV18 (@CNBCTV18Live) March 23, 2018
#BANKNIFTY #Nifty #NIFTYFUTURE #nifty50 #banknifty
#SandpaperGate #500DaysOfDemoDisaster #ShahOnAajTak #MannKiBaat #Bancroft #EarthHour #Mayawati #YONObySBI
Investing is worship? pic.twitter.com/eeLsYF0nqx— Mr. Equity (@MrEquity0) March 24, 2018
So the sensex has gone from 36-37k to 32.5k. How many"experts" saw it coming
— Harsha Bhogle (@bhogleharsha) March 23, 2018
#Sensex and the #Nifty are down 10 per cent from their peaks. Close below 10,000 will hit market sentiment as it is also a psychological support level. @businessline
— lokeshwarri sk (@lokeshwarri) March 23, 2018
From Record High
Sensex -3584 Pts -9.8%
Nifty -1092 Pts -9.8%
Midcap -3106 Pts -14.2%
BankNifty -3450 Pts -12.5%@CNBCTV18Live @NSEIndia @BSEIndia— Mangalam Maloo (@blitzkreigm) March 19, 2018
Meltdown in stock markets is coming, sell on rallies: Ashwani Gujral
We saw a few days ago that Ashwani Gujral has raked in mammoth income of about Rs. 2 crore in FY 2017-18.
He has revealed details of how he made the income and also given particulars of his margin money requirements and risk management strategies.
Earning such high income is quite commendable given that most fundamental investors are in a poverty-stricken state in FY17-18.
Even technical analysts appear to be in the doldrums given the silence from their front.
Prima facie, the hefty income suggests that Ashwani Gujral is able to correctly read the technical charts and predict the movement of the markets.
His latest tweet is quite chilling to say the least.
“Get ready for a meltdown in all markets, a sprint towards 9500 on nifty at least. All rallies remain a sell. S&P 500 on script!!!,” he has warned in a grim tone.
A slump of the Nifty to 9500 means a 5% fall.
It is obvious that individual stocks will plunge more.
Mid-caps, small-caps will be most affected.
Micro-cap stocks will get slaughtered.
Get ready for a meltdown in all markets, a sprint towards 9500 on nifty at least. All rallies remain a sell. S&P 500 on script!!!
— Ashwani gujral (@GujralAshwani) March 24, 2018
Overnight-> USD weak & wobbly. Equities continued fall, yields rallied. Stocks continue move from Thurs, close near lows of the day. Dow -1.77%, SPX -2.1%, Nasdaq -2.4%. SPX now touching the 200-dma at 2585, from where we bounced off early Feb. #DowJones #Markets
— Prashant Nair (@_prashantnair) March 24, 2018
Other technical experts appear to be endorsing this viewpoint though their commentary is not very intelligible.
Trade Wars will not lead to a Bear Market: Shankar Sharma
Shankar Sharma has been providing us valuable guidance from time to time on what our strategy ought to be.
A few days ago, Shankar counseled us that stock market corrections offer “great buying opportunities” if we can find stocks which are debt-free and have robust earnings opportunities. He called it the “investing mantra“.
Investing Mantra: "Unleveraged balance sheet+intact earnings growth+stock price down 30%+ = Great Buying Opportunity": Shankar Sharma, 1973
— Shankar Sharma (@1shankarsharma) March 8, 2018
He also confidently assured us that the correction is “normal” and “marks the start of a massive relative bull market in Emerging Markets”.
I am absolutely clear: this isn't a 2008 repeat. This is nothing but a normal correction of a vastly overbought equity market globally. And this also marks the start of a massive relative bull market in Emerging Markets vs Global Equities. Yaad rakhna…
— Shankar Sharma (@1shankarsharma) February 6, 2018
(Samir Arora & Shankar Sharma uncork the bubbly to celebrate)
Now, Shankar has been at pain to allay our fears that the trade war between USA and China will lead to a prolonged Bear Market.
Shankar explained that for a Bear market to occur, four circumstances have to be present simultaneously.
There must be:
(i) a build up of “massive debt”,
(ii) stock valuations must be driven by euphoria despite the absence of fundamentals, earnings or cash flows,
(iii) There must be “massive speculation” with all and sundry buying stocks;
(iv) there must be a major macro or economic crisis on the horizon which sparks fear amongst the populace.
None of these conditions are present today and so there is no risk of a Bear Market, Shankar has confidently declared.
SPX 19 year return ( previous high): 4% CAGR. Nasdaq: 2% since 1999. Oil still 60% away from Highs. EM & India still below 2007 all time highs ( dollar terms). Nikkei way away from Highs. Europe lower than 2007. Where is the Bubble, that Bear Markets start from?
— Shankar Sharma (@1shankarsharma) March 24, 2018
IMO, bear markets happen when 1. Massive Debt build up. (2008) 2. Zero fundamentals, zero earnings or cash , crazy valuations (2000) 3. Massive speculation. ( Japan 1990) 4. Major macro crisis. ( Asia 97, Latam 80s). Which conditions are present today?
— Shankar Sharma (@1shankarsharma) March 24, 2018
Conclusion
It is obvious that we have to play the balancing game now. We can’t go out with all guns blazing given the reality that the correction may be deep and long-drawn. At the same time, we need not cower in fear and hide in the bunkers. We can buy small bits and pieces whenever the cuts are deep and build a long-term portfolio of high-quality stocks!
Jiske pas yaha maal ha usko lagta ha teji aayegi Jo Khali ha usko Mandi dikh rhi ha
Market will go down, I had said this on Budget day when many were telling this as temporary correction and buying opportunity. Now every body will slowly fall in line, it is very less due to global sell off. India will underperform Global markets due to Third Class Taxing Union Budget .
Dear Kharbji..
looks like you again started whining .. please be happy that we made tremendous wealth in last few years to pay the taxes .
We have a strong Indian economy that will grow 8% for almost a decade .
If you have so much issue to pay taxes for wealth created in India, you are free to invest elsewhere in the world where you need not pay the taxes .
For gods sake please stop it. it looks so childish for such a senior boarded like you .
Best regards,
Prashant
I am not going to invest outside India as Govts keep on coming and going, policies will keep on changing. I may not have faith in politicians but have full faith in Indian Enterpenures. Stock market investment is my Hobby , so will remain invested for rest of my life. Presently I am interested in Insurance sector for long term.
No Body has any objections for higher taxes if are meant for helping poor, Development of Infra or strengthening Defence. But how a common man like me should react when heavy doze of tax is to compensate Legal plunder of Demonetisation where about approx estimated 25000 to 30000 Crores (why Govt don’t give exact figures) gone down the drain in printing of new currency and distribution with Zero Gain. I am not talking about other loss of GDP in lakhs of Crores and pain of public . This money was drained to wastage on one side, and Deputy Army Chief telling Parliament panel that Army has 68% of weapons of Vintage class with defence Budget at lowest of GDP since 1962 China War and Govt talking of two front war.
Kharb is not a senior boarder – he is a professional Modi-hater … so his whining will never end. It is second nature !
When everybody fears, be brave to enter market. Find bottom out quality stocks. Trend reversal can happen anytime in our bull market n likely to see consolidation process around 10k lvl in Nifty.
Calm down everyone. Kharb and Prashant relax as well. Take a deep breath. Now i realize all of you are very fearful, frustrated and displeased. And everyone has been asking me to please share my opinion.
Firstly LTCG tax was unnecessary this year. It was very foolish to undertake a year before general elections. But this was expected because the finance minister is highly uneducated. The burden on the middle class cannot be ignored, and I am very certain the middle class will refrain from voting in 2019 which will be disastrous.
Secondly the entire global front has mounted a war like strike on the equity market. The damage has been done and April will dictate the breadth of the damage and the severity. I will post the final conclusion only then. All kindly wait till then.
Patience is key. Patience will come only by understanding the situation. The understanding of the situation will come by knowledge. In 2008 meltdown Lehman brothers collapsed. Entire financial system had problem in US. It takes time to mend. Now, the issues here are excess run up last year, #LTCGT implementation and Trump announcements. These are not collapsing factors. These are time to time concerns, where markets take the opportunity to correct. FII are covering their shorts. FII have deep pockets, they won’t cover easily. You can’t time the markets. If we are not managing fear and greed, it is difficult to get returns.
After budget I also felt market will fall down and correct minimum to 9500, the level of 9500 is derived based on Fibonacci levels.
https://invst.ly/71tud
If we take a look on Nifty based on technical, then it looks in downtrend.
IF YOU LOOK AT THE LONG TERM CHART OF DOW JONES INDEX THEN YOU WILL WONDER WHY PEOPLE EVER WENT SHORT ON THE MARKET . THE KEY IS TO INVEST ACCORDING TO YOUR RISK APPETITE WITH PROPER ASSET ALLOCATION AND SPEND TIME IN THE MARKET .