Trump, Tariffs & Mayhem - Part 2
Make no mistake. It is a war which is on. US vs China. And as of now, Donald Trump has blinked.
There must have been tremendous pressure in the background on the US president from his team and his donors to reverse the tariffs. The 90-day ceasefire is a means to save face.
The global markets have cheered. But the two big elephants of the jungle are still at loggerheads and the small animals rejoicing all around them can get trampled at any time.
Trade between China and the US will probably come to a standstill. The challenges of inflation in the US and overcapacity in China haven’t gone away. This current stalemate will have to be resolved one way or the other for the global markets to actually become stable.
I envisage a few weeks, maybe months, of posturing, continued policy flip-flops and uncertainty. But once the dust settles down, there will once more be opportunities for wealth creation.
Unless there are some new developments overnight, the Indian markets are likely to open gap up tomorrow. My suggestion is to continue to remain cautious and brace for volatility in the next 90 days.
The Indian market continues to be in a downtrend. Investors should continue with their SIPs in their portfolio stocks and take advantage. One can deploy cash slowly over the next couple of weeks in the portfolio.
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