U.S “Liberation Day” trumps global markets

The global markets are reeling from President Trump's announcement of tariffs on April 2nd, which has sent shockwaves through the financial world. U.S. stocks tumbled at the open after the tariff news, with the impact being felt across European and local markets. Luxolo Mehlomekulu, Head of Dealing and Trading at Mazi Asset Management, joined CNBC Africa to provide insight into the situation. The unexpected imposition of a 30 percent tariff on South African imports and the inclusion of countries like Lesotho in the tariff list have caught many by surprise. The magnitude of the tariffs has raised concerns and uncertainty in the markets, leading to a significant drop in stock prices. Companies like Apple and Nike are among those affected by these new levies, with uncertainties surrounding their future guidance and performance. As the market grapples with the repercussions of the tariffs, there are growing concerns about the potential negative impact on global economic growth and inflation. The focus now shifts to the Federal Reserve and whether they will intervene with rate cuts to stabilize the economy. While market expectations were already pricing in some rate cuts, the extent of the tariffs' impact may lead to further adjustments. The unpredictability of the situation has raised fears of a global recession triggered by a trade war or inflationary pressures forcing the Fed to hike rates. As the market navigates these challenges, investors are closely monitoring European markets and China for potential opportunities amid the ongoing volatility. The broadening out of investment strategies and a reevaluation of traditional market trends are becoming essential as uncertainties loom. Despite the current turmoil, experts like Luxolo Mehlomekulu remain cautiously optimistic, urging investors to let the dust settle before making any hasty decisions. The road ahead remains uncertain, but strategic planning and a watchful eye on market developments will be key to weathering the storm.