CGTN Europe spoke to investment manager and business commentator Justin Urquhart-Stewart.
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00:00Well, let's talk to Justin Urquhart-Stewart, the investment manager and business commentator.
00:05Justin, welcome back.
00:06Analysts, many of them wearing red braces around the world, were prophesying doom 24 hours ago.
00:13What is going on here?
00:14I mean, the markets are rebounding and recovering, but the trade war is escalating.
00:20And the markets at the moment can't judge what's happening.
00:22So what you saw was an immediate reaction.
00:24The market's going down, and that was actually held up because, obviously, China and Japan had holidays during that time.
00:31So the start of the week was negative because of that anyway.
00:34But it was so great that they were just catching up.
00:37But the underlying questions are still there in terms of resolving issues.
00:41So the markets will still be very thin.
00:43It'll be like tap dancing on ice.
00:46Tap too hard and you'll go straight through it.
00:48But on the other hand, remember that actually the investment is all about longer term.
00:53And for investors themselves, in their pension or not, they'll get their money from terms of dividends and compounding those dividends over time.
01:00The gyrations of stocks being bought and sold by silly gifts and red braces is almost beside the point.
01:05And remember, most of the trades carrying out on that New York floor weren't done by humans.
01:10That's not an insult to the Americans, but they were automated trades.
01:14So once you have sales going through and hit a certain level, there's an automatic sell for the next level.
01:18So you have to be very cynical over all of this.
01:21And the markets will remain jittery till they can see any solution in the future.
01:26We can't see one.
01:27You say they're jittery, but this is more than a wobble, although it's not a crash.
01:32So how is what we're seeing, how is it different to say what we saw in 2008 in the financial crisis
01:38and also what we saw with the Covid pandemic and how that shook things up in 2020?
01:43Well, first of all, you come up with a new title rather than a crash and say it's now actually we're just resettling,
01:48resighting the market.
01:49And that's another way of putting it.
01:51What you also then seeing is people in a position where most investors will actually be hanging on.
01:56They won't just be traded because they're frightened as to what's happened.
01:59Do the cash come straight out now?
02:02But what was interesting here was it wasn't just stocks being hit.
02:04You saw gold being hit as well.
02:06And surely we were being brought up.
02:08If the world gets nervous, you go and buy gold.
02:10But actually what was happening, of course, had investors covering their other losses forced to sell gold.
02:16And remember, you have a lot of trading known as margin trading,
02:19where, in fact, you're borrowing money to do the trade.
02:21But if the stock's not going down, the person who's laid their money wants it back now.
02:27The headlines in the airtime is being dominated by presidents, one in particular, prime ministers, investors around the world.
02:35Let's just talk for a moment about ordinary mortals and what this means to you and me.
02:41To save us, I mean, trillions wiped off pension funds.
02:46But I guess petrol, fuel is going to get cheaper.
02:50There's some benefit to it.
02:52I mean, yes, there will no doubt there will be other inflationary pressures coming through.
02:55So it's nice to actually see some of those prices coming down very dramatically.
03:00Remember, there was only one country that was stupid enough to set their oil budget price at $100 a barrel.
03:06Oh, the Russians.
03:07Good.
03:07But they got that wrong too.
03:09So don't underestimate the weakness of the Russian economy.
03:13It is a very dire state indeed.
03:16Obviously running a war, but also its trade and all the sanctions against it.
03:20There's a lot of pain there.
03:21So actually what happens now for all of us in terms of our pension money, look through this and actually say we assume there's going to be a recovery.
03:29If you think the end of the world is nigh, then I suggest you go buy a crate of whiskey and go and sit in a cave in Wales.
03:35So is this it?
03:36Have we hit rock bottom?
03:37Are we now going to see if we're on clawing things back?
03:40Because I do feel that this is very different.
03:42We're not part of a business cycle.
03:43We haven't had a global pandemic.
03:45This seems to be of one man's making.
03:48Well, one man's making, who's, of course, with his views will change on a sixpence.
03:51Not that he's ever met a sixpence.
03:53And so therefore he will change his mind just like that.
03:56And that's what makes markets nervous.
03:59Give us some idea of where we're going.
04:00I'll judge the certainty or not.
04:02And if you can't, I'm out of it.
04:03Justin, thank you.
04:05I should say more Justin later in the programme in part two of our tariff-tastic coverage.
04:11Justin Urquhart, Stuart, for the moment.
04:13Thank you very much.