Expectations have completely changed!

This morning, global stock markets plummeted across the board, with the Nikkei 225 index falling by over 8%. South Korea's stock index also dropped nearly 5%, and the MSCI Asia-Pacific index widened its decline to 2.3%. Australia's S&P/ASX 200 index saw a drop of 6.3%. U.S. stock futures continued to crash between 4% and 5%. Commodities such as oil and copper also experienced a sharp decline. Global investors now seem to only need cash.
This morning's news shows that U.S. President Trump stated that he did not intentionally manipulate the market sell-off. He has spoken with European and Asian leaders about tariff issues but cannot predict what will happen in the market. When asked about market performance, he said, "Sometimes you have to take your medicine."
At the same time, on April 6 local time, U.S. Secretary of Commerce Howard Lutnick stated in an interview with CBS that the U.S. would not delay the imposition of tariffs, and that "reciprocal tariffs" would take effect on April 9 and last for several days. This broke the market's expectations for a delay in tariffs over the weekend. This may also be the main reason for the market's sell-off this morning.
Additionally, compromise seems difficult to resolve the issue. A letter sent by Vietnam on April 5, obtained by foreign media, shows that Vietnam proposed to eliminate tariffs on all imports from the United States. Trump's trade advisor Navarro pointed out in an interview on Sunday that Vietnam's move is not enough.
News from the Trump administration
Latest news shows that U.S. President Trump stated that the market sell-off was not intentional. He has spoken with European and Asian leaders about tariff issues but cannot predict what will happen in the market. He stated that he will discuss trade issues with Israeli Prime Minister Netanyahu. The leader of El Salvador is about to visit, and if the law allows, he is willing to send American criminals to El Salvador. He said, we need to turn the situation around, and we need to do it quickly. One day, people will realize that tariffs are a very good thing for the United States!
According to CCTV news, on April 6 local time, U.S. Secretary of Commerce Howard Lutnick stated in an interview with CBS that the U.S. will not postpone the imposition of tariffs, and the "reciprocal tariffs" will take effect on April 9 and will last for several days. In addition, Lutnick mentioned that the U.S. must include the uninhabited islands where those penguins "live" in the scope of the increased tariffs to prevent certain countries from trying to exploit loopholes. He also stated that even in the face of a global stock market sell-off, the Trump administration will firmly implement reciprocal tariffs against major U.S. trading partners.
It is worth noting that compromise seems to be ineffective as well. A letter sent by Vietnam on April 5, obtained by foreign media, shows that Vietnam proposed to eliminate tariffs on all U.S. imports. Previously, U.S. President Trump announced a 46% tariff on Vietnam. Sulin urged the U.S. not to impose any additional tariffs or fees on Vietnamese goods and requested to postpone the implementation date of the tariffs announced by Trump from April 9 by at least 45 days.
Mr. Navarro, Trump's trade adviser, noted in an interview on Sunday that Vietnam's move was not enough. "Even if you simply lower our tariffs, or reduce them to zero, our trade deficit with Vietnam will still be as high as about $120 billion," he said. He added: "The problem is all the non-tariff fraud that they have taken. Navarro mentioned that these include acts such as export subsidies.
Global plummet
After the above remarks were made, global assets continued to plummet (except for U.S. Treasuries). The Nikkei 225 index fell more than 8%, hitting its lowest level since October 2023. The Tokyo Stock Exchange's financial stock index dropped more than 12%. The Australian S&P/ASX 200 index's decline expanded to 6.3%, while the South Korean stock index plummeted nearly 5%, leading to a suspension of programmatic trading sell orders.
The commodity market also experienced a widespread collapse. Crude oil futures continued to plunge on Monday, with WTI crude oil futures briefly falling below $60 per barrel for the first time since April 2021, with an intraday decline of up to 4%. Spot gold fell 1% during the day, reported at $3008.30 per ounce. Spot silver dropped by as much as 3% at the start of the session, reported at $28.5 per ounce, with this commodity having accumulated a massive drop of 13% last week. New York COMEX copper fell by as much as 8.5% to $4.03 per pound. Cryptocurrencies have also joined the global market sell-off, with Bitcoin and Ethereum down 5% and 10% respectively, and other cryptocurrencies also experiencing heavy losses.
From the perspective of Chinese assets, the RMB assets in the morning session are in a state of depreciation.
CITIC Securities stated that in the medium term, tariff policies pose greater stagflation risks to the US economy, and also constrain the Federal Reserve's hedging policies. The market's shift from recession expectations to recession trading is becoming more likely. The timing of China's policy efforts may be advanced, and the synchronization points of the China-US cycles may also come earlier. The window for allocating core assets may consequently open up sooner, potentially coinciding with the trading opportunities brought about by the external shock. In terms of style, from the perspectives of policy economic cycles, relative profit advantages, long-term capital pricing, and changes in market ecology, core assets are expected to enter a new cycle, and the GARP strategy (which stands for Growth at a Reasonable Price) is anticipated to outperform significantly. In allocation, it is recommended to focus on four major directions in the short term: self-controlled sectors, military industry, domestic demand, and dividends, while in the long term, it is advisable to pay attention to the trends of global manufacturing reconstruction demand and the overseas expansion of Chinese technology.