GRAPH READING – WHAT THREATENS MARKETS THE MOST
1) Escalation USA x China (≈ 32%) – BIGGEST RISK
Expected impact
Strong declines in S&P 500, Nasdaq, Asian and European exchanges
Pressure on semiconductors, technology, industrial commodities
Increase in VIX and flight to dollar, gold, and Treasuries
Why it is critical
It is the largest economic axis in the world
Tariffs, technological sanctions, or Taiwan have an immediate effect on asset prices
2) Sharp slowdown in China (≈ 30%)
Expected impact
Declines in emerging markets (including Brazil)
Pressure on commodities (iron ore, oil, soybeans)
Stress on banks exposed to global credit
Most affected sectors
Mining, energy, international banks, logistics
3) Unexpected monetary tightening (Fed / ECB) (≈ 28%)
Expected impact
Rapid correction in stocks (mainly growth/tech)
Decline in real estate markets and credit
Global repricing of risk assets
Observation
Even a simple change in rhetoric (“hawkish surprise”) usually generates technical sell-off
4) Fiscal or political crisis in the USA (≈ 25%)
Expected impact
Extreme volatility on Wall Street
Pressure on the dollar and Treasuries
Systemic risk for being the center of the global financial system
Typical triggers
Government shutdown
Budget impasse
Electoral or institutional crisis
5) Sovereign debt crisis in the European Union (≈ 22%)
Expected impact
Increase in spreads (Italy, France, Spain)
Declines in the European banking sector
Contagion to global markets through the financial system
6) Expanded geopolitical conflict – Middle East (≈ 20%)
Expected impact
Abrupt rise in oil prices
Global inflationary pressure
Generalized declines in exchanges + search for defensive assets
7) Systemic stress in Japan (≈ 18%)
Expected impact
Turbulence in global fixed income markets
Repricing of carry trade
Indirect impact on global exchanges
simultaneous
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