Experts about the risk of a stock market crash

Since the top level on February 18, the Stockholm Stock Exchange’s broad index has fallen by over 16 percent. During the week there have been several sharp declines and on Friday it took new momentum when China announced that they introduce customs on US goods.

Experts that DN has spoken to agree that the Chinese moths aggravate the situation which is very unclear. It is necessary that negotiations on tariffs begin instead of calming the markets.

How big is the risk of a new stock market crash?

– The risk has definitely increased. I think many people have misjudged how far Trump was about to go with the customs threat and also the size, says Maria Landeborn, senior strategist at Danske Bank.

– If the size remains, the risk is imminent for a recession. And something needs to happen pretty soon for this to stabilize, she continues.

Even Frida Bratt, Savings Economist At Nordnet, dangers see the current uncertainty.

– The risk is absolutely that this can be something more persistent. It depends a lot on what happens to the customs. If it is fixed can be a difficult stock market year, she says.

– It is very difficult to say what scenario it will be, Frida Bratt continues.

She also points out that signals about negotiations can dampen the turmoil.

– There is a lot of psychology in this. It depends on how the willingness to negotiate is at the Trump administration and it will control if it becomes short -lived or significantly more long -lasting.

Nordea’s chief economist Annika Winsth Also points to the great uncertainty that prevails.

– If you want to be serious, we do not know at all where it will end. We have market movements that are large but there is no crisis atmosphere in the market, she notes.

She believes that it indicates that actors hope and believe that there will be some form of negotiation between the United States and the other countries and that customs will be milder.

– Should it turn out that you will not get it, there can be greater movements in the market, she says.

– I think Trump thinks he can back down, but it’s like stopping a falling knife. It may not be possible and then we can get major market movements, Annika Winsth continues.

She emphasizes that it is impossible to predict what will happen.

It’s not the first time In history as great uncertainty, disorders create the stock exchanges. The financial crisis that started in 2007 is an example. Then it was uncertainty about American home loans that got the global economy rocking. Then the courses fell by over 50 percent from top to bottom.

The pandemic crisis 2020 is another example when the courses lost around 30 percent. Annika Winsth notes that there is a big difference between the two historical events and the present:

– What is extremely regrettable is that a financial crisis and a pandemic are things that happen, while this is self -inflicted. The Trump administration has deliberately taken these measures that allow us to get the risks in the economy. It is extremely regrettable.

– But you should be careful to compare these because we do not know where this lands, says Annika Winsth.

Read more: Customs chaos does not have to mean higher prices