When Stocks Tumble, Where Does Wall Street Invest?
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What is the main topic discussed in this episode?
Here's your Money Briefing. I'm J.R. Whalen at The Wall Street Journal in New York. Monday's wild ride on Wall Street triggered by a new threat of U.S. tariffs on Chinese imports brings to light other places besides stocks that investors look to invest in the face of volatility. We'll explain in a moment. First, these money and market stories you should know. The Trump administration is closer to allowing 30,000 seasonal workers to return to the U.S. this summer.
What triggered Monday’s steep selloff on Wall Street?
Foreign workers coming back to the U.S. will be reissued H-2B visas, and in order to hire the seasonal workers, businesses will have to prove they would suffer irreparable harm without the extra workers and that their workers were cleared for the visas in one of the past three fiscal years. Seasonal workers are used by businesses such as landscapers, fisheries, county fairs, and holiday resorts to fill lower-skilled jobs they can't find Americans to do. And a timely report has come out that coincides with the national debate over college loans. The National Bureau of Economic Research says that canceling student loans can make life easier and more lucrative for borrowers.
How do tariffs and U.S.-China trade tensions create market uncertainty?
More specifically, the report cites about 10,000 borrowers who had their student loans canceled. Those borrowers were more likely than borrowers with loans to return to school, change jobs, or move. And those borrowers were also less likely to default on other forms of credit. Now, you're probably wondering how those borrowers were able to be rid of their loan obligations. Turns out those loans were dismissed by judges after the National Collegiate Student Loan Trust sued borrowers but didn't have the proper documentation to prove the borrowers actually owned the loans.
A threat by President Trump to add to U.S.
Which safe-haven assets do investors turn to when stocks tumble?
tariffs on $200 billion in Chinese imports to 25% sent stocks into a tailspin on Monday. That threat of tariffs comes at a time when both sides seem to be moving closer to a trade agreement. But we've been down this road before, with the path to a U.S.-China trade accord facing bumps and steep hills.
Why do tech and chip stocks amplify market declines during trade fears?
Let's bring in Wall Street Journal reporter Donato Paolo Mancini to help us understand why markets react so negatively and why it sends shivers down investors' backs. So Donato, whether the threat of tariffs is a negotiating tactic or not, The core of the matter here is that Wall Street does not like uncertainty, and the mystery surrounding the prospects for a trade agreement has stock investors really looking for other destinations for their money.
As you say, markets really hate uncertainty, and markets have indeed been banking on the prospect of a trade deal later this week as they continue to climb throughout the first part of this year. As you know, there was a big sell-off last year that pushed equities lower, and it was quite brutal.
How could a breakdown in U.S.-China talks affect global corporate earnings and growth?
So when you have something as big as a trade deal between the US and China become pretty much uncertain after the president of the United States tweets in two iterations that that might not happen, of course, the reaction is not going to be easy or it's not going to be positive. So obviously, now that the trade deal, you know, it People say it's a tactic. People say it might happen after all, and it's a tactic in negotiations. So you've seen a resurgence in safe havens, like gold, for example, that added in today's session. You've seen a resurgence in the Japanese yen, for example, that I think continues to add about 0.3% against the dollar. So obviously, people are trying to sort of run for the hills, if that makes sense, now that there was this big sell-off today.
Well, it does make sense. And there was a sell-off on Monday. And when we see stocks sent on such a steep decline, as was the case on Monday morning, investors often move away from risk and into something safer, like gold, as you point out. And that's what's happening now.
Absolutely. Absolutely. I think, you know, when you have something that is as essential and as big and as long-awaited as a trade deal between
What should investors watch next as trade negotiations evolve?
the world's two largest economies and the prospects kind of go up in flames at some point it's inevitable that there will be some sort of run for safer assets obviously the other issues that you have for example chip stocks and apples and stocks like apple that are used to sort of herald big upswings or big downturns in the market um they've gone down a lot today and paradoxically they had led
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:05–0:31
2
What triggered Monday’s steep selloff on Wall Street?
0:31–1:10
3
How do tariffs and U.S.-China trade tensions create market uncertainty?
1:10–1:54
4
Which safe-haven assets do investors turn to when stocks tumble?
1:54–2:14
5
Why do tech and chip stocks amplify market declines during trade fears?
2:14–2:59
6
How could a breakdown in U.S.-China talks affect global corporate earnings and growth?
2:59–4:16
7
What should investors watch next as trade negotiations evolve?
4:16–7:49
Speakers
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