Stocks dramatically plummeted last week following the arrest of a high-profile Chinese telecom executive, at the request of the U.S. government, for allegedly violating sanctions against Iran. The news reignited fears of a trade war between the world’s two largest economies, casting further doubts on a sustainable truce between the two nations.
The U.S.-China Trade Battle Heats Up- Video Transcription
Patrick Brunson: 00:00
So the stock market once again has fallen sharply over the last week as continuing fears over U.S. China trade relations and concerns of a possible global economic slowdown have all kept investors on edge. The Dow Jones dropped more than 500 points, bringing its two day losses to more than 1,300 points combined. The S&P fell 2 percent while the Nasdaq also plunged nearly 2 percent as well. Trade fears heated up after Huawei CFO Meng Wanzhou was arrested by Canadian authorities on Wednesday of last week in Vancouver and now she's facing extradition to the United States. This arrest decreases the likelihood that a permanent U.S. China trade deal will actually be reached. Huawei is one of the largest mobile phone makers of the entire world. So there's really no wonder as to why this is affecting the markets the way that it is. With the combination of what Chinese president Xi said on China trade, a fear of an economic slowdown in twenty nineteen is getting higher and higher. Especially with the slow trickle of the Mueller investigation reports coming out week after week.
Patrick Brunson: 01:14
It's really not all surprising to see buyers strike and sell in the after hours markets. With the fears of an economic slowdown pushing stocks lower, the big question is, will this lead to a recession? Well that's one of the biggest things is that we now have more than 60 percent of traders now believing that this will lead to a recession within the coming months leading into mid 2019. So with that said, we have to be in a position where we can protect our portfolios from the market volatility and we have to be proactive with this move as well. Too many Americans wait until the last second these days to protect themselves from financial turmoil. And it's mostly because they don't want to believe the warning signs that are being put in front of them before they take action. So you have a higher chance of losing 40 or 50 or 60 percent of your assets in a market correction or a crash than you actually do having your house catch on fire or getting into a car accident.
Patrick Brunson: 02:17
Yet people pay more money and put more insurance on those assets than they do their own money in the markets. At the end of the day, you don't want to wait. You don't wait until your house is on fire to run down to your insurance agent and put a policy on it. Doesn't work like that. You have to be proactive as opposed to reactive if you want to make it through the next recession that is. So to get more information about the topic today and what you can do to help protect your portfolio, call the number on your screen or click on the link below to get your copy of U.S. Money Reserve's latest report, ‘The next recession, Here's what it could look like‘. There is a lot of information here that could help you and your loved ones prepare for the crisis ahead and be more proactive and secure with your portfolio. So please call the number on your screen to get your copy and as always thank you for tuning in to U.S. Money Reserve's Market Insights.