讀後心得

Trump's tariff policy has severely impacted Wall Street, leading to a sharp decline in the financial markets and causing hedge funds to face the largest margin calls since the pandemic began in 2020. Reports indicate that major banks on Wall Street, due to a significant drop in the value of their holdings, are requiring clients to add more margin. This market volatility has raised concerns among investors about a repeat of "Black Monday." On the 3rd, hedge funds experienced their worst market performance, selling off large-cap tech stocks and high-end consumer goods, with net leverage ratios falling to an 18-month low. Even amid investor pessimism, gold was unable to escape a heavy slump.

The U.S. President Trump's reciprocal tariff policy has led to a worsening of global trade tensions, triggering a sharp decline in financial markets on Thursday and Friday. Hedge funds faced the largest margin call since the pandemic in 2020, raising concerns in the market of a repeat of a "Black Monday" situation. "Black Monday" refers to October 19, 1987, when the Dow Jones Industrial Average plummeted by 22.6%, marking the largest single-day drop in history, which in turn triggered a widespread decline in global stock markets and caused panic in the financial markets. According to reports, Wall Street banks have asked hedge fund clients to increase their margin requirements as collateral for loans due to the sudden drop in the value of their holdings. Several major banks have issued the largest margin calls to clients since the outbreak of the pandemic in 2020, highlighting the extent of market volatility.

After Trump announced the imposition of tariffs, China quickly retaliated, and other countries followed suit. The U.S. stock market's S&P 500 index faced its worst week since 2020, with significant sell-offs in oil prices and high-risk corporate bonds. A senior executive at a major brokerage noted that the declines in interest rates, stocks, and oil prices created synchronized fluctuations across multiple sectors in the market, leading to the scale of this margin call. He stated that the current situation is reminiscent of the intense market volatility seen in the early days of the pandemic. The head of the brokerage division at another large bank indicated that they are proactively reaching out to clients to assess the risk status of their overall investments.

It is understood that major Wall Street brokerages convened an emergency meeting early on Friday to address the increasing demand for margin calls. Morgan Stanley's latest report noted that the performance of U.S. long/short equity funds on the 3rd was the worst since 2016, with an average loss of 2.6%. The report also highlighted that the scale of hedge fund sell-offs on that day was comparable to the largest sell-off waves in history, nearing the levels seen during the U.S. regional banking crisis in 2023 and at the onset of the pandemic in 2020. The sell-off was particularly focused on mega-cap tech stocks, AI-related software and semiconductor companies, high-end consumer goods, and investment banks.

Additionally, this wave of selling has caused the "net leverage ratio" of U.S. long/short equity funds to drop to its lowest point in 18 months, at around 42%. If not for the fact that many hedge funds had gradually reduced their stock positions and lowered leverage levels in response to Trump's trade war threats in the past few weeks, the current losses might have been even more severe. Interestingly, even in a climate of low global investor sentiment, traditional safe-haven asset gold also suffered, plunging 2.9% on the 4th. Analysts pointed out that gold may have been used to fill margin gaps.