What a Difference 5% makes!
The market has adjusted to the trade battle with China and we are somewhat prepared for a tariff battle related to Autos and Auto parts with Europe coming soon. I think the 5% on Mexico imports, with the warning that the tariffs could climb to 25% is a dramatic turn of events. If there is not progress regarding illegal immigration, via Mexico, in the months to come tariffs will rise. This adds another layer of uncertainty for corporations, investors, policy makers and central banks.
The markets were taken a bit by surprise:
Euro Stoxx 50 had a key support level at 3300 which has been broken and a close below today will not bode well for the Bulls next week.