Another week, another spectacular Trump-related volatility event.
After threats to the Fed Chair Powell and the Capture of the Venezuelan President, President Trump wanted some more spice.
And the spice he gave: Over the weekend, the President threatened many European Nations and leaders with additional tariffs until the US can buy Greenland – a striking demand right as the World Economic Conference was commencing in Davos.
The event featured many references and speeches toward a New World Order, one characterized by greater powers (China, US, Russia) expanding their grip. In contrast, others unite – the end of the Rules-Based order of the past 25 years.
The best speech is easily Canadian PM Mark Carney’s, which suits the current geopolitical landscape perfectly—a must-watch.
Luckily for the world as we know it (or at least NATO as we know it), Trump backed off his rhetoric and cancelled tariffs that would have been implemented on February 1 – the tone has largely abated since, even if some worries remain.
The higher tensions did not come without a bit of Market Volatility – Stock Markets across the world suffered losses from 1% to 3% as investor sentiment degraded.
After all, the Venezuela Capture opened possibilities that would scare anybody: Threats are not all threats; they can turn into harsh realities.
Luckily, Trump offered yet another TACO to Wall Street, and they ate at their satiety. Stock Markets are closing the week way closer to their all-time highs.
The late session is offering some profit-taking, but Equity benchmarks have recovered most of the correction.