Fun fact by @keisarijokinen
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In my opinion, it’s a perfectly valid reason that falling stock prices create political pressure on the country’s crazy politicians. I haven’t been particularly happy about the reasons for the fall in US stock markets (among others), but the consequences have been welcome. Without what we’ve seen, Trump would hardly have made the statement seen today. However, this chaos won’t end here, and the damage done in recent days won’t disappear.
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Sorry, expressed a bit poorly: “The weight of US stock exchanges in global stock markets is two-thirds.” Which is just as significant for an investor.
Quote from yesterday’s Helsingin Sanomat. Lippo Suominen, OP’s Chief Strategist for Wealth Management, is speaking.
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One shouldn’t take the superiority of the US quite so much for granted. The market offering the best returns has varied quite a bit, and even the US has had long periods of underperformance, even decades long.
Dr. Bryan Taylor studied stock market returns from the 1600s onwards, and the USA, Australia, Sweden, and Switzerland were among the best-performing markets. In his research, he named the “four horsemen” that have most destroyed stock market returns: war, inflation, socialism, and autarky.
For China and some other emerging markets, the problem has been that despite strong growth, dilution has ruined returns.
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As evening darkens, it’s probably good to reflect.
A few points:
- Trump’s nerve failed. Global trade war put on hold.
- The market no longer believes in permanent tariffs (i.e., >10%). As the 90-day period approaches, no one believes that the deadlines for “good” will not be extended again.
- In practice, 10% is probably the minimum price one will have to pay for access to the US market in the future, +/- investments in the US or US products.
- Most small and dependent countries (e.g., Bangladesh or Vietnam) will probably accept this without complaint.
- The struggle with China (and perhaps the EU) will continue for a long time. Europe’s economy will be a loser in the short term, as China will dump goods into Europe at an accelerating pace, while China’s export market simultaneously shrinks (this is not such a big problem for the US). The US will probably use the EU as a weapon against China (i.e., the EU joining the US’s de facto trade embargo).
- In principle, we are following Bessent’s playbook. A new Bretton Woods perhaps once China is dealt with.
- Russian oil will likely be released onto the markets, thanks to a semi-shady peace agreement.
- Inflation effect thus small in the US, recession canceled (not globally).
Markets:
- Dollar strengthens. US recession canceled. US market underperformance vs. EU reverses.
- The biggest winners are US firms independent of exports that are not affected by tariffs (e.g., Microsoft, Alphabet - the biggest tech companies are still outside the scope of counter-reactions, not suffering from tariffs; potential newest additions are likely the first to fall out, still industrial and agricultural products are likely the stumbling blocks in negotiations). In the long run, European export-driven manufacturing companies (e.g., German car companies) are losers.
- ECB and China lower their key interest rates. IPO and M&A on hold.
So I was wrong - tariffs (not over 10%) are probably not possible in the long run. There isn’t enough nerve for a full-blown trade war.
Disclaimer: Since last Thursday 95% Cash - from this evening 90% long USD and US listed (you can guess the names…). I don’t invest small sums. I would never have believed I’d be rotating a EUR / Finland / Germany value portfolio into USD growth stocks within five days.
Minute decisions, ultimately based on one tweet. A lot of room for improvement in risk management. As sums grow, interest rates must be pushed into the portfolio, whether one wants to or not.
I might be the biggest idiot in the world. I’ll look at five years of performance and go to sleep with my tech stocks, assuming I’ve played this tolerably. I’ll skip writing and continue with popcorn.
I’d be more than happy to be wrong again. HEX still needs to be beaten.
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This image probably tells by itself about the magnitude of yesterday’s movement. This is not expected to be surpassed anytime soon. Trump, however, has several years left in his term, so never say never.
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Right after, I saw this almost 17 years later 
My thoughts: I wouldn’t celebrate the market’s rise yet. Personally, the situation in Taiwan worries me (especially since 70% of all the world’s chips come from Taiwan), and US/China relations will certainly affect the global market in other ways too. Surely the US is more dependent on China than vice versa.
I came to the forum for the first time in years and immediately I’m bearish. Now I could take another couple of years off =)
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Lo and behold
EDIT:
I apologize @keisarijokinen, my intention was not to write that you are a funny fact. 
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In the morning, small and medium-sized companies in Helsinki made the most of yesterday’s monster rally in the USA. Larger ones started more moderately. As the US premarket turned red, the biggest gains from small firms have been eaten up, and the large ones are still holding on and even rising. Uncertainty, however, continued to gnaw at the markets, and it will be interesting to see if today will only be a breather for the US or if there’s still enough confidence.
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You are probably right, and this is precisely where I question the functionality of the markets.
For example, the current situation: the USA has completely eroded its own trust and fallen out with China. Despite this, stock markets in the rest of the world, such as Finland, have fallen more sharply than the US market? Why on earth?
According to my logic, Finland now has more opportunities to fill the trade relationship vacuum created by American foolishness, and because at the same time we received concessions from the Americans, it seems that the biggest loser in this, according to the latest situational information, is the United States. This situational information, however, updates differently on the hour and half-hour.
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Because the USA has 2 of the world’s largest stock exchanges (NYSE and NASDAQ) and the dollar is a reserve currency. Finland is a tiny little peripheral market that, to top it all off, has a pleasant eastern neighbor. So why wouldn’t Finland fall more? The waves from the bigger boys’ antics will surely hit here one way or another. Finland’s muscles certainly won’t fill any trade relationship void. Even on a European scale, it’s unlikely to succeed in the big picture when everything happens slowly without unified decision-making. Even when it comes to supporting Ukraine, we seem to have more or less returned to mundane activities after the initial barking and finger-pointing.
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Hahahaha. I didn’t even notice myself. Of course, I consider myself quite funny, even though I’m not an absolute fact. 
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Even that junk iPhone produced in China is acceptable when made in China for a third of the price. Would it add anything if you paid 3x? More than just junk comes from China. It’s completely pointless to claim that only junk comes from there, because a lot of products for Western brands are produced there.
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Some haven’t had their deals in order 
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Worth watching - opens up the American way of thinking.
“On the side of the little guy.” Hehehe. We are all crumbs on the bank floor.
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Have a good start to the week!
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So, did it turn out that Mr. Stock Market realized that Mr. Bond Market also sets limits for Mr. President?
And did this come as a surprise to everyone, so to speak? Can it be concluded from somewhere that the big players knew to count on this, or did they? Somewhere it was probably said that the stock dip was, however, bought specifically by small investors, and institutions sold. Also, in my opinion, a guardian angel named Bond was not mentioned in the Traders Club’s baseline forecast.
Is the situation where we’re anxiously waiting for the next orange post over? Should we just let the old man spread rumors?
Signed: someone has to ask the stupid questions too
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This seems to be the correct interpretation. The question was never whether those limits would come, the question was only where and how they would come. No one probably believed that Trump alone, by shouting on the internet, could make the world work the way he wanted. The market is “smart” in the sense that it waited for evidence on the matter. Even though everything is priced in, the market also needs to know what can be priced in first.
I interpreted Jukka’s forecast as being more from a technical perspective. He did not take a stand on what factor would bring relief, other than that one is likely coming.
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OP’s chief strategist’s tweet about global stock market plunges
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What direction is Helsinki heading tomorrow 
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