This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.
The Department of Government Efficiency, run by Elon Musk, says it is cutting back on governmental spending. However, the Trump administration’s efforts to rehire previously sacked workers have caused uncertainty thus far.
DOGE is a skewed reflection of the state of the American economy. U.S. President Donald Trump is launching a barrage of measures to strengthen the domestic economy, changing their trajectory in mid-air and incurring collateral damage inside the nation’s boundaries. Notably, U.S. markets have been declining and took a severe beating on Monday.
Trump claims that tariffs penalize trading partners and safeguard American companies. However, the largest economy in the world appears to be suffering.
What To Note Today
A Bad Day On The Markets
Investors’ worries about a recession caused U.S. equities to plummet on Monday. In its worst session since September 2022, the S&P 500 fell 2.7%, the Dow Jones Industrial Average fell 2.08%, and the Nasdaq Composite fell 4%. The White House minimized the market decline on Monday, claiming that business activity was more “meaningful.” On Tuesday, markets in Asia-Pacific also fell. Japan’s Nikkei 225 dropped about 1% as its fourth-quarter GDP showed lower-than-expected results.
Trump Dismisses Worries About Tariffs
Businesses’ worries about the uncertainty of U.S. President Donald Trump’s tariff proposals were disregarded. That’s what they always say. In an interview with Fox News that aired on Sunday, Trump stated, “We want clarity.” “Their clarity is abundant.” Trump responded, “I hate to predict things like that,” when asked if he believes a recession is near. “Look, we’re going to have disruption, but we’re okay with that,” Trump later stated.
Increasing China’s Consumption
Chinese authorities increased subsidies for a consumer trade-in program last week, reaching 300 billion yuan ($41.47 billion) this year. Beijing has not given out cash handouts, but government representatives have stressed how important consumer spending is to the nation’s economic growth.Â
In the meantime, Chinese investors are seizing stocks. The Wind Information database shows that net mainland Chinese purchases of Hong Kong stocks reached a record 29.62 billion Hong Kong dollars ($3.81 billion) on Monday.
Automakers Receive Relief For A Month
Automakers Stellantis and Volkswagen have announced that Trump’s 25% tariffs on Canada and Mexico will not apply to their North American-made cars for a month. BMW, however, stated that it will be subject to taxes. Separately, U.S. Energy Secretary Chris Wright stated Monday that the United States and Canada might agree to exempt imports of gas, oil, and other energy resources from tariffs.
Issues at X and Tesla
Tesla’s stock fell almost 15% on Monday, marking the worst day since September 2020. It continues the company’s seven-week losing streak, the longest since it first listed on the Nasdaq in 2010. In an interview with Fox on Monday, Elon Musk, the CEO of Tesla and the director of the U.S. Department of Government Efficiency, stated that he is managing two companies “with great difficulty.” X, Musk’s social media platform, went down many times in one day.
Reviving China’s Tech Scene
A week after Beijing stepped up its calls for artificial intelligence assistance, Chinese IT businesses rushed to introduce new products. According to analysts, China’s AI industry is seeing a rapid pace of innovation, which would be advantageous for some suppliers who provide the infrastructure for the technology.
Other Reports
Although there have been concerns that the U.S. economy may be on the verge of a recession due to global market volatility and geopolitical unrest following President Donald Trump’s return to the White House, experts argue that a downturn is not yet imminent.
“I doubt we’ll discuss a recession in the United States. Despite Donald Trump, I think the U.S. economy is strong,” Holger Schmieding, chief economist at Berenberg Bank, stated on Monday on “Squawk Box Europe.”
I don’t think there is an immediate risk of a recession because the U.S. labour market is still very stable, energy costs are starting to decline, and there will likely be some tax breaks and deregulation in the near future,” Schmieding said.
