In the ever-changing financial market, recent events are like a storm, bringing a tremendous impact on the market.
First, let's look at the impact on data. U.S. employment data and service sector inflation data became the trigger for market volatility. In November, U.S. JOLTS job openings unexpectedly increased by 259,000, bringing the total to 8.098 million, reflecting that the activity level in the job market exceeded expectations. At the same time, the ISM non-manufacturing PMI rose from 52.1 in November to 54.1, while the price index soared from 58.2 to 64.4, reaching an 11-month high. This acceleration in service sector inflation significantly dampened the market's previous optimistic expectations for a Federal Reserve rate cut. The potential expectation for a rate cut disappeared like a burst balloon. Under such a shift in expectations, asset prices, including Bitcoin, fell accordingly, as the expectation of a rate cut often brings about a loosening of funds, and now that expectation has vanished, reducing the supporting factors for asset prices.
However, the shock of the data was just the prelude; Trump's remarks pushed market panic to a climax. During a press conference lasting an hour, Trump announced several astonishing plans. These plans have been referred to by U.S. media as 'new imperialism.' They included not committing to refrain from using the military to seize Greenland and the Panama Canal, among other things. This undoubtedly constitutes provocative and subversive rhetoric. Regarding Denmark, he threatened to impose 'very high' tariffs in an attempt to achieve the goal of acquiring Greenland; for Canada, he suggested using economic means to absorb it into the United States. Such remarks deviate from the norms of international relations and violate basic international principles.
The analysis of senior political commentator Jonathan Chait may reveal part of the truth; he believes this 'new Trump imperialism' has a strong 'performative' nature. Trump may be trying to pressure allies through this seemingly 'bluffing' approach. On the international political stage, demonstrating a tough stance toward allies to gain benefits in other areas, such as economic interests or political discourse power. At the same time, this rhetoric can also cater to the thoughts of a large number of ordinary voters. The electorate in the United States is complex and diverse, with some voters offering blind support for policies that reinforce America's so-called 'global hegemony' or excessively tilt toward national interests.
From the market perspective, Trump's remarks triggered the spread of panic. Investors are worried that escalating international tensions may lead to a series of chain reactions. International trade may be severely affected, casting a shadow over the prospects for global economic development. This uncertainty has led market participants to sell off assets, causing market prices to plummet. Whether in the stock market or in other major commodity markets, it is difficult to escape the cloud of panic. Click to follow me for timely updates on cryptocurrency trends and to seize market opportunities!