讀後心得

Trump's reciprocal tariff policy has dealt a heavy blow to Wall Street, leading to hedge funds facing their largest margin calls since the pandemic began in 2020. As global trade tensions intensified, the market plummeted on Thursday and Friday, with investors fearing a repeat of "Black Monday" in 1987. Major banks, facing declines in their holdings, are demanding hedge funds to provide additional margin, with reports indicating that the scale of stock sell-offs on that day approached the largest recorded in history. Additionally, gold was also affected by market volatility, plunging by 2.9%.

The equal tariffs policy of U.S. President Trump has sparked global trade tensions, leading to significant damage on Wall Street on the 3rd and 4th, with hedge funds facing the largest margin calls since the pandemic began in 2020, raising concerns among investors about a repeat of "Black Monday." On October 19, 1987, Black Monday saw the Dow Jones Industrial Average plummet by 22.6%, marking the largest single-day drop in history and causing panic in the financial markets.

It is reported that, due to the decline in the value of holdings, banks on Wall Street are requiring hedge fund clients to increase margins as collateral for loans. Several large banks have issued the largest margin call notifications, highlighting the severe market turbulence. Following Trump's announcement of tariff increases, China and other countries quickly launched retaliatory measures, causing the U.S. stock index S&P 500 to head towards its worst week since 2020, with significant sell-offs also affecting oil prices and high-risk corporate bonds.

A senior executive at a major brokerage pointed out that the comprehensive decline in market interest rates, stocks, and oil prices has led to the significant scale of this margin call, reminiscent of the extreme volatility seen at the onset of the pandemic. The head of the brokerage department at another large bank also mentioned that they are actively assessing their clients' investment risk situations. It is understood that on Friday morning, major Wall Street brokerage teams held emergency meetings to prepare for the increasing number of margin calls.

According to the latest report from Morgan Stanley, for U.S. long/short equity funds, the 3rd recorded the worst day since records began in 2016, with an average loss of 2.6% across funds. The scale of the sell-off has equaled past major sell-off waves, primarily concentrated in large tech stocks, AI-related companies, as well as high-end consumer and investment banking stocks.

Reports indicate that this wave of selling pressure has caused the "net leverage ratio" of U.S. long/short equity funds to drop to an 18-month low, around 42%. If hedge funds had not reduced some stock holdings in response to trade war threats over the past few weeks, current losses would likely be even more staggering. Furthermore, despite the gloomy sentiment among global investors, traditional safe-haven asset "gold" has also not escaped, plunging 2.9% on the 4th. Analysts suggest that gold may be used to "fill the margin gap."