Written by Mike Dolan
LONDON (Reuters) – This morning
What matters in the United States and global markets today
Written by Mike Dolan, editor, man, financial industry and financial markets
The Wall Stock stock now has erased almost all post -election gains and the risks that turn into a momentum defeat unless there is some change in the dark economic image or the unconfirmed US government trade policy position.
While watching this exciting image that is unfolded in the American market, today he looks at the restart of the European defense spending and the extent to which another round of joint borrowing by the European Union countries may be cultivated.
Look for this and more on the defeat of Wall Street below.
Market accurate today
* President Donald Trump’s tariff was exposed to investors, with fears of an economic shrinkage driving the stock market that spent $ 4 trillion in the peak month in S&P 500. * A major economic consultation for President Donald Trump on Monday to talk about the recession caused by the uncertainty in the policies of his management tariffs, even when a survey from American families showed For consumers grow more pessimistic their horizons. * The Greens in Germany pledged to prevent enormous access to the state borrowing to the state to renew military growth in Germany, but they also referred competition proposals on Monday a settlement offer. * Ukraine President Folodimir Zellinski met with Saudi Crown Prince Mohammed bin Salman before talks between Ukrainian. Washington officials hoped to provide Gradialprogress towards ending Russia’s war with Ukraine. * US President Donald Trump aims to build mineral refinement on the Pentagon military bases as part of his plan, Topost local production of critical minerals and control of this sector.
Fainting the epic in the market
The landmarks accumulated in the reflection of the American market on Monday.
The S&P 500 is 2.7 % worst day per year, as it closed less than the moving average for the first time since 2023.
In individual stock moves, Tesla decreased by 15 %. The auto giant has now lost more than 50 % of its value since its peak in December.
Perhaps anxiety, like the moves in stocks, was the turmoil in the credit market, as borrowing on the bonds of American companies with a high return rises to the widest level against US Treasury bonds since September.
There was no new operator behind the segment on Monday, regardless of the constant uncertainty in the collective tariff and the softening market, as President Donald Trump and administration officials admitted that economic shrinkage was a danger in the first quarter.
The latest survey of consumers at New York Federal Reserve has highlighted the increasing concerns about the deterioration of the family’s financial positions. And the high rate of unemployment to the highest a year from now to the highest levels since September 2023.
Although the Federal Reserve made it clear that interest rates are suspended in the foreseeable future, the treasury in the treasury has witnessed returns for two years, which reached the lowest point since October, and traders hit 2025 federal reserves to 85 basis points.
The dollar slid again on Tuesday to 2025.
With the previously reduced the classification of the main investment banks recommendations, anxiety has spread all over the world. The stock index throughout the country is now negative for this year as well.
However, the future contracts for securities and porcelain abroad early on Tuesday with small gains.
Let’s now take a deeper look at some of the transformations that may be changing in Europe.
Dawn of the euro defense bonds?
The European Union’s joint borrowing plan is likely to be a small part, which will be necessary to defend the continent, causing some to ask whether the dawn of defense bonds will be the next large expansion in borrowing at the European Union level.
For global investors who seek to rebalance their investment portfolios beyond the isolation, the development of the AAA liquid national debt group in Europe is now interesting.
More development for the joint borrowing of the European Union beyond the “next generation” recovery funds – allocated to be just over 800 billion euros (866.88 billion dollars) in total – will lead to the size of this complex to further 1 trillion euros, near the heavy local government debt scale in Germany, France, France.
Last week, European leaders supported plans to spend more on defense and stand by Ukraine in a world established by President Donald Trump from the reshaping of American military and trade alliances. However, it seems that the 150 billion euros loans are jointly proposed by the estimates of what will be required in joint financing.
“It is unlikely that Carsten Nickel, a deputy director of research at the advisory company, is not likely to be a reference to the President of the European Commission, referring to the President of the European Commission, referring to the President of the European Commission, in reference to the President of the European Commission, referring to the President of the European Commission:” without Von der is likely to have 150 billion euros in loans a first step, but it is unlikely enough. “
Nickel believes to reduce the budget of the parallel euro budget to allow more defensive spending will only get the continent so far, as military spending will continue to compete with other local priorities.
Moreover, Eastern European countries may swing to assume greater defensive responsibilities to protect the entire bloc only because of their proximity to Russia. So they may request joint financing to exchange the burden.
Joint borrowing can be the cheapest path. Although the standard AAA is the result of the 10 -year debts at the European Union level over the past week to more than 3.1 %, the cost of the European Union funds is still less than in the majority of the European Union, along with Germany, the Netherlands and European Union countries.
Nuclear umbrella
Interestingly, the nickel also links pressure on joint defensive spending in the European Union with France’s proposal last week to provide a “nuclear umbrella” to the European Union security.
“It is possible that the French nuclear protection will come at a financial and political cost for its beneficiaries, especially Germany,” he wrote. “This can hand over (French President Emmanuel) Macron the opportunity to demand the joint borrowing of the European Union in return, at least for military purposes – a major political victory that may sell well at home.”
This step can also provide the new German government the cover it needs to throw any remaining objections to joint borrowing. If the urgency offered in Berlin last week to increase its defense budget is any indication, the other great expansion of the European Union’s business bonds may be.
How much is the only real question.
The European Union sees 500 billion euros of investments as needed over the next decade. But raising defensive spending to 3 % of production will require approximately 200 billion euros annually, in addition.
Tank Bruegel Think believes in Brussels that the new reality means an increase in annual defensive spending by 250 billion euros to about 3.5 % of the short -term gross domestic product, and suggested financing half of it at the European Union level. This will witness about 625 billion of the new European Union bonds issued by the police that were sold by 2030.
The European Reform Center said last month that the issuance of the defense bonds was possible and had many aspects. In particular, they noticed that a fund worth 500 billion euros in the current revenue will generate an annual interest bill less than 20 billion euros.
“Since everyone will be on a hook to pay the debt, it can reduce the free countries to the defensive capabilities of rapidly nominating peers like Poland,” she said.
Moreover, European debt piles, in a total, are much lower than those in the United States and Japan, so the AAA classification of European Union defense bonds may seem safer.
The expansion of the joint borrowing in the European Union may provide consolation to international nervous investors, even as it kept the military necessities that many lead to ready. And if he sees another round of the roof of the US debt in the United States that the American sovereign classification is under renewable pressure, alternatives may seem more attractive.
Today’s scheme
Although many investors expected Donald Trump’s victory in the November elections to launch another boom in the stock market with tax cuts and the abolition of restrictions, the hideouts that have led the market over the past few years have reflected all post -election gains. Tesla is still the forefront in this regard, as it lost more than 50 % of the December summit.
Today’s events to watch
* Small business investigation in the United States in February, Jantsjob, meets the European Union Finance Ministers in Brussels, Vice President of the European Central Bank, Luis de Gindos, the present * The US Treasury sells $ 58 billion of notes 3 years
The views expressed are the views of the author. It does not reflect the opinions of Reuters news, which, according to the principles of confidence, is committed to integrity, independence and liberation from bias.
($ 1 = 0.9228 euros)
(Written by Mike Dolan; Editing by Anna Sizymanski)
