European stocks plummeted in fear of US tariffs

Mon, 11/18/2024

by Ellie LeTu

Source: Financial Times

• The Euro declined amid hopes for rate cuts

  • Currently priced at $1.05, its lowest level since the 2022 energy crisis.

  • Markets anticipate an ECB rate cut to address the widening growth gap with the US.

  • Following Trump’s election, a 10-20% increase in US tariffs on EU trading partners is expected.

• EU stock market underperforms

  • EU stocks have lagged behind US stocks for the past eight years.

  • Manufacturing sector, a key EU economic driver, is struggling.

  • The lack of leadership in the technology sector makes the EU less competitive than the US.

• Trade war ahead

  • Weaker demand from China, where 9% of EU exports flow to.

  • The US tariffs exacerbate the exports slowdown in EU.