Stock markets around the world have lived a tough day as a result of the new phase that the trade war between China and the US is having. Following the words of the American president, Donad Trump, in the sense that he was going to increase exports of Chinese products with tariffs of up to 25%. In a key week for the good progress of an agreement that can put an end to the endless meetings between both parties to reach a satisfactory point in this trade war that is having between two of the most powerful countries in the world.
The reactions of the equity markets have not been long in coming with falls that had not been remembered for many months. The Asian markets were responsible for giving a serious warning to small and medium investors when the price of their shares fell in a very violent way during the early hours of Monday. The main stock market indices did so by 6%, while the Nikkei from Japan it depreciated around 2%. Giving a warning about what was going to happen hours later in the stock exchanges of the old continent and how it could not otherwise in the North American itself.
In the end, the declines in European income were not as negative as predicted by the markets futures. At the end of Monday's session, indices were hovering around XNUMX percentage point, albeit with more pessimism about investors' intentions. To the point that voices have been raised in the sense that these movements may be the prologue of a new bearish stage in the equity markets. Where in some cases of the values some supports of special relevance have already been broken and this is something that has not liked a good part of the financial analysts.
Trade relations with China
The trigger for this crisis is in trade relations between China and the US. This Friday it was proposed that there should be an agreement between both parties, but the statements of the American president, Donad Trump, have been a jug of cold water for the investor perspectives. Not in vain, his intention is to raise tariffs on Chinese products that would go from 10% to nothing less than 25%. That is to say, almost triple and this is one of the worst news that financial markets can receive at the moment.
To the point that from the International Monetary Fund (IMF) has been alerted in these days that for there to be international economic growth, the interests of the Chinese must be taken into account. And the possible rise in trade tariffs is not good news to calm equity markets. Not much less, as it has been collected by bags around the world. In an unfortunate day for the interests of small and medium investors who have seen how the prices of the shares have quickly gone down. With all business sectors affected by this selling trend.
We will have to wait until Friday
In any case, the last word is not said and it will be necessary to see how the equity markets evolve this week. Waiting to see if it is just a ploy by the American president, Donad Trump, to achieve an agreement beneficial to their interests. In this sense, the predictions of some analysts of the financial markets that believe that in the end the blood will not flow in the movements within the stock market. Beyond other series of technical considerations and maybe also from the point of view of its fundamentals.
While on the other hand, what is certain is that it has produced a very negative psychological effect among small and medium investors. Where the selling pressure has been imposed clearly on the comparator and with an intensity that is very noteworthy. With a very high volume of contracts, both in Asian markets and in those of the old continent. For fear that there may not be an agreement in the trade war between China and the United States in the end.
Search for liquidity in the markets
One of the first effects of this fact is that liquidity has been imposed as the strategy that thousands and thousands of investors are looking for to protect their positions. Fearing that these declines could worsen in the equity markets. Therefore, there will be no choice but to wait a few days to see how this new episode of the trade war between China and the US is going to end. Although it is very strange that it is his own Trump whoever pulls the evolution of the bags down when precisely he has been its main defender. Where, everything seems to be a strategy to achieve a better trade agreement with the Chinese.
In any case, it will be necessary to be very aware of its evolution because the direction that the stock market can take from now on depends on it, in one sense or another. To the point that it can help you earn a lot of money in the operations carried out or, on the contrary, leave you many euros along the way. With a very notable difference between one trend and the other that will mark the evolution of your investment portfolio from these precise moments. Anyway, the month of May has not started with good vibes for the interests of small and medium investors.
Banks and steel companies the worst stops
Within this context of declines in shares listed on equity markets, there is no doubt that it is banks and steel companies that have developed the worst performance and above other relevant sectors in the stock market. Leading the losses of this beginning of the week, and that in the Spanish case, has meant very strong depreciations above 3%. After a few weeks in which they had recovered their positions after an excellent performance on the trading floors. Being two of the segments that have presented greater volatility in the conformation of their prices.
On the other hand, it cannot be forgotten and referring to Spanish equities, that its indices are at a decisive moment. After spending many weeks in a trend of clear laterality, with supports at 9.200 and 9.600 points so that in the end it is decided to go up or down. Where from now on, everything can happen as things are in the financial markets. So that in this way, small and medium investors are or are not in a position to open positions in their investments in the stock market, as would be their wish in some of their cases.
Unfavorable months for the stock market
Anyway, there is one thing for sure, and that is that we are entering a few months that are not very conducive to the momentum of the equity markets. But rather the opposite as has happened in recent years. On the other hand, we are also very close to the summer months where the contracting volume decreases very remarkably. With fewer share purchase and sale operations and greater volatility in them. This is something that must be taken into account when developing any kind of investment strategy. Therefore, precaution should be the common denominator of our actions from now on and above other considerations.
While on the other hand, it is necessary to correct some excesses that have occurred in these months in which perhaps it has risen are apparent reasons to develop these upward movements. Not surprisingly, the period between May and October is one of the worst for opening positions on the stock market. Being considered by financial analysts as one of the worst to make the savings profitable. On the contrary, it is a good time to be completely liquid in the savings account. To later take advantage of the business opportunities that emerge in the coming weeks.
It is very difficult to operate
In this sense, it cannot be forgotten that there is a good chance that the price of the shares will be very high after the holidays. more competitive than at the moment. And this situation must undoubtedly be taken advantage of to optimize the operations that we have to carry out in the last part of this stock market year. In an exercise that is not being very easy to promote any kind of strategy in the financial markets.
Where there is even talk of an upcoming economic recession that can leave us hooked on open positions in the equity markets. A factor that will undoubtedly keep investors away from this kind of investment. Especially to protect your money against possible adverse scenarios.