hi everyone so back in 2018 there was a trade war between China and the US and the US market corrected by roughly 22% you can see this from this chart and that correction lasted for roughly 11 bars right to which means 11 months so because every bar here is I'm looking it on the monthly candle now why am I telling you story because uh sitting in 2025 right so here we are the NASDAQ has corrected by roughly 8 % from its peak we are in the middle of a very intense trade war or a tariff
war between us and multiple other countries for example recently us has slabbed tariff on Canada Mexico China three of its biggest trading partners and this is not slowing down this is only escalating even us fed or the US Central Bank is also anticipating that this trade war is going to you know sort of might go Haywire it might impact the economy so can the US Stock Market for more the short answer is yes is that a great buying opportunity again it depends on your time frame but for someone like me I have been waiting for
this type of a correction so that I can put big money okay this is two number three what is going to be the impact on India now this really boils down to whether you're are looking at a optimistic pessimistic or a baseline scenario of how this trade war is going to play out from this point so on this video I'm going to do two things one is that I'm going to help you understand the economics behind this trade War how it's going to transp expire right and hit the stock market and second I'm going to
talk about how much can the stock markets fall in India and the US and accordingly if you are building new positions or if you want to put more money in India versus the US so this 15 20 minute conversation is going to give you a lot of clarity around this topic so let us begin and first and foremost let us understand that what exactly is it that the US is doing and what kind of impact or counter impact it can have on the world economy now for that you need to understand that who us trades
with so it's three of its biggest trading partners are Canada Mexico and China and here they export less the US exports less but Imports more right so for example if you look at Mexico the total export that it does to Mexico is $334 billion but the amount of stuff that us is importing importing means bringing it into their country they are bringing a lot more right so they are a net importer now this has significant repercussions because Trump had gone ahead and said that you know what the American citizens are being taken for a ride
and why because for example if China is exporting this pen to us and us is importing or bringing this pen into their country China or Chinese exporters are paying very less tax so what I'm going to do is that I'm going to impose more taxes on you guys and you have to pay more money to sell this product in the US now for people who do not understand much economics you would sayil that okay fine like maybe us is on the right track here it helps their country but is it the answer is much more
complicated and the short answer is no it doesn't really help because in the short term this pushes the price of the spend or increases inflation now us being a net importer basically the inflation is likely to go up this is not just my viewpoint even musk which is one of the biggest shipping companies in the world a global player at scale they are also anticipating the US inflation to go up now is it good for the economy bad for the economy well this is not the only Factor there are multiple fact fact at play so
let me help you understand three different scenarios of this tariff SL trade War so let us first discuss the pessimistic scenario that if us goes Full Throttle on this trade War then what is going to happen so essentially three things are going to happen the first and foremost I already explained that inflation in the short term is going to go up in the US now this is a fairly big problem because the last 2 three years in the US has been an inflation War right so the US government has been spending a lot of money
like that caused inflation they printed a lot of money to it in the economy so the cost of living has gone up in the US like crazy now the FED has been dealing with inflation now because of this trade War the inflation is likely to go Haywire now if for some reason again we hit very high inflation then it's a huge problem for the stock market how much fall can we anticipate well if I have to just pull out a random number then I would say that it would at least fall to this 200 day
moving average line and here from this current level you can at least anticipate another 10 to 12% fall okay now you'll say that okay know this is highly unlikely like I mean Market Falling by like 26 27% that seems unlikely even if you keep aside the covid crash right from here to here the market had fallen by roughly 20% so and this was due to inflation Factor alone so this 2021 to 2022 phase was an inflationary phase right and the FED had to fight inflation and therefore the market came down by 20% in this zone
now there is if this trade War escalates into inflation there will be impact of trade War there will be impact of inflation now is there a cause to worry about well the answer is no because see what happens is that the same factors do not hit the stock market twice this phase that I was telling you right this phase this inflationary phase where the market went down by 20% it was due to inflationary concerns now do we have inflationary concerns here yes even if you assume that we have inflationary concerns is it going to really
hit the market hard no because the same factor is there for example covid multiple waves of covid have come but the primary covid fall happened here right from this Zone to this zone right so understanding the simple concept that the markets do not fall due to the same factor twice is a very important bit okay so this was the pessimistic scenario that inflation will go ha right and anything can happen but this is the maximum 25% fall that we looking at right so from the current levels we can expect another 12% 133% fall on NASDAQ
okay this is the maximum fall that I see for the reasons that I just help you understand now comes a baseline scenario that okay what is is a more likely scenario or a general scenario that could play out okay so the general scenario that could play out would comprise of three factors one is that how would the US consumption play out in the next 6 to 12 months number two how would the GDP progress now inflation I have already discussed that inflation maximum fall that can come due to inflation is this much that's what I'm
anticipating so let me talk about these two points right so the first key point is regarding consumption data in the US right a big part of US economy depends on consumption that how up or down the consumption data is going okay so the general private consumption in the US is not going down in fact it hasn't gone down much okay there are going to be spikes and you can see this that the average trades around like you know 0% growth rate because the US population is completely full there is like yeah I me it's hard
to grow consumption in the US so it sticks around this level no matter what happens okay so I don't think that this is a major concern again the concern or a realistic concern is around the GDP growth forecast now what is likely to happen is that over the next two to three quarters so let's say that the trade War takes another 6 months to solve then for the next two to three quarters we can see softening of GDP softening of GDP means that the GDP growth rate will slow down now recently us had posted good
GDP growth rate and therefore we saw this entire rally right right from here to here right this was a good very healthy rally of 75 % on NASDAQ between 2022 all the way till 2024 why because the economy or the GDP growth was supporting now a more realistic scenario is that there is going to be a GDP slowdown now in that circumstance how much fall do we anticipate well to be honest in that scenario we are likely to go into a sideways consolidation so sideways consolidation something like this right might happen that okay we might
fall here we might rise here we might fall here we might rise here depending on how extreme this trade is that if it lasts for like 6 months then there is likely going to be a quick resolution we might fall something like this that we'll fall till here and then we will go up right otherwise if this takes time right 12 months 18 months to solve right then it be depends right so the answer that due to GDP concerns how much would be the impact on the stock market well it really depends right to what
extent this trade War continues don't worry I'll not confuse you at the end of the video I'll give you summary points right so if you are looking to invest money or if you are looking to pull out money invest more in India you'll have a very clear thought process right and in case you want to learn things fundamentally I also run a US Stock Investing based Community where you can track whatever I'm buying and selling in the US market so the notifications are given out very quickly entire rational is explained so if you're a serious
investor do consider joining that our community is already on a 5 to 6% Alpha compared to the market we started building this portfolio fairly recently and it is performing really well so in case you are a serious investor do check out my links I combine fundamentals with technicals and then help you understand what kind of investing decisions you can make so coming back right so I have discussed two scenarios one was a pessimistic scenario where we are seeing or we are likely to see another 14% correction second is a baseline scenario here it really depends
to what extent this trade War escalates right I don't think it will escalate much to be honest I don't anticipate more than another 5 6% fall in a midterm if we are looking at like a six-month resolution because most of the impact or negative impact of trade war in the short to midterm has already been factored into the market okay third point is an optimistic scenario now what is an optimistic scenario Optimist that Trump is making a lot of noise and he's threatening you know countries and all that stuff those countries have also said okay
boss this person looks to be a little bit crazy let us retaliate now then Trump will come back again to the negotiation table but if this entire situation or this entire drama the way it is unfolding if it gets wrapped up very quickly that's the most optimistic scenario can this happen I would say yes there is a high possibility that this will happen why because Trump believes in theatrics okay he will like do zinsky interview in front of everyone which was not really needed to be honest but he's a showman right so at the end
of the day he's playing a dual role president plus a businessman okay so he would not want to hurt his own businesses it does not make sense there was no reason for him to launch like a you know Meme coin or whatever so he launched that coin and he made a lot of money in cryptos also so he's a businessman at the end of the day he's interested in protecting his wealth and taking panga with so many other countries it does not Bard well for the entire business community in the US right so we need
to work with the assumption that Trump is there to protect his own interest so he would want a faster resolution so this is an optimistic point the second optimistic point is that the interest rates in the US are already very high people are debating that you know what okay the feds are going to cut the interest rate not cut the interest rate no one is saying that fed is going to is the interest rate and that is when the problem Begins for example in this entire Zone this zone right this is where interest rates were
Jagged up right so interest rate went up and therefore the markets corrected quite a lot okay but now yes there might be delay in terms of cutting the interest rates but the interest rates are it's very very unlikely that they are going to increase the interest rates now that's the point that you know what because there is a little bit of fire power left in terms of cutting the interest rates and rallying the market if you see like maybe another 5 7% correction in the market right or anything less than 15% total correction from the
top there is a good chance that interest rates will be cut right again if we find bad GDP numbers over the next two three quarters again interest rates will be cut and the markets will go up okay so that's how US market is likely to play according to my analysis next Point comes that okay you are painting a positive picture about the US Stocks why is that right see it's very simple that at this stage in the world if you have to pick the three fastest growth industries which would be artificial intelligence powered by semiconductors
so semiconductor becomes data centers Robotics and generally Tech now which are the two strongest markets on this number one Us by far number two China right so we can say that okay these two countries are competing with each other rest of the world is nowhere close now from an investing lens take a look at China Market this is a video that I had done for four and a half months ago the China Market is up 35% at that point in time no one was interested in China now is interested in China so China Still Remains
a good bet and same applies to the US that okay fine the market might correct by let's say even 225% right right it correct but people here will buy in bulk the reason being that they understand that on a 3 to 5year basis right now one of the strongest Market Still Remains us because the top three four triggers of growth in the world will come from the US still now what about India markets should you invest in the Indian market or should you not invest in the Indian market so let me again pull up Nifty
chart and here you can see that Nifty has corrected by how much in its recent draw down right so it has corrected by almost 17 16 17% so there is enough correction that has already happened compared to NASDAQ again take a look at this chart here there it had corrected by roughly 78% right so so in India there is already Panic that's point one point two is that India is a domestic consumption play now for example take a look at this chart here you can see that in this market Fall how much other sectors have
corrected now financials has corrected the least so if like me you had invested in Finance stocks You' not be that scared right of course you can nit pick you know G1 Finance fell by this month or idfc fell by this month but generally like in that phase you were also invested in like HDFC bank which has gone up by like 15 20% baj Finance has gone up by 20 21% when the market had fallen by 78% right so these kind of stocks have balanced the portfolio what is the larger message that we getting from India
that hey it's a domestic consumption plate purely right there is no point in investing in speculation right for example defense infrastructure spending so in summary I'll suggest you the following points that number one US market looks really good from a long-term perspective it makes sense to buy at every fall so right now if you look at the technicals right so this is NASDAQ right so there is a good 7 8% correction that has already happened so the second support level for Nasdaq comes here and where is it and how much would be the fall so
this is another 7 8% this is so this is the maximum fall that I see happening at least on a midterm basis because even if we look at an negative scenario the negative scenario plays out here right so which is the your third support level right so to say now this entire fall if it happens from the top how much will it be right so this will be a 27 28% fall now this is a fall that has not happened the last time and this time the triggers for fall are inflation trade War these triggers
have already played out in the past so therefore adding positions at each of these Falls makes a lot of sense right how exactly to do it again I'll communicate on my US Stock and investing community in case you guys are interested check it out Indian market is already discounted I've have pretty much maxed out my positions in the Indian stock market but when it comes to the US long-term very good growth prospects and in the short term you need to be careful in terms of how exactly you are building positions this is the trick in
the US market right now that you don't need to build everything in one go you have to be sensible in terms of your position building I hope you enjoyed this video if you did do subscribe to the channel and I'll see you soon
