It's a 'Bloodbath' in Equity Markets: Neil Shearing

The American investor class — that top 10% that owns almost all of the stocks — is quickly coming to terms with its new, much-diminished status in the era of Donald Trump’s trade offensive. From the corporate executives counting their stock options to the billionaire hedge-fund moguls and everyone in between, they’re merely collateral damage now.

The market crash Trump stoked last week was one for the history books. The Nasdaq 100 plunged into a bear market. More than $5 trillion was wiped off the value of all US shares in two days. Commodities collapsed and corporate-bond investors frantically bought insurance contracts that shield them from default. The losses have piled up nearly non-stop since the moment Trump announced tariff rates as high as 50% on dozens of countries, a plan so aggressive few thought it possible.

Early Monday trading brought no relief as stocks tumbled across Asia and Europe and US futures slid. That it all happened at the behest of a man who held sacred the Dow Jones Industrial Average as a benchmark of his popularity in his first stint in the White House prompted disbelief in financial circles across the country. Why is this happening? What is he doing?

“I've learned to cope with stress over the years,” says Richard Steinberg, “but at 4 o’clock in the morning, I'm up awake thinking about these things.” At Focus Partners Wealth in Boca Raton, where Steinberg is a senior wealth adviser, the calls from worried clients keep coming, he says. He tries to calm them down but acknowledges he himself is frustrated — “very frustrated” — by Trump’s approach. “It lacks a level of sophistication.”

For more on the market moves, Tom Keene and Paul Sweeney speak with Neil Shearing, Group Chief Economist at Capital Economics, and Damian Sassower, Chief EM Strategist for Bloomberg Intelligence.

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