Two words in particular from the Chinese government have pushed stock markets around the world amid fears of a recession in the United States and in the main European economies.
On Thursday, China promised to introduce "necessary countermeasures" after the US decision to raise tariffs on Chinese goods by $ 200 billion.
The Ministry of Commerce stated in a statement that it "deeply regrets" the US decision to increase tariffs and "we will have no choice but to take the necessary countermeasures".
The apparent escalation of the trade war has led European markets to fall on Thursday, with markets in Britain, France and Germany that have traded over one percent less. US equities were also in the process of modest reductions in trade opening.
The opening to the downside comes among the developments in the US bond market which saw for the first time since 2007 the return, or interest rate, on the 10-year reference Treasury bond briefly below the Treasury yield at two years.
This is a sign that traders have sought the sanctuary of US government bonds amid concerns over an economic slowdown.
In the past, this so-called "reversal" of the US yield curve accurately predicted the last five recessions. Traders have clearly been afraid of this development, with the Dow Jones industrial average losing 800 points, or 3.1%, on Wednesday – its worst performance in 2019. The Australian stock market has lost over 63 billion dollars .
"The countdown to a recession has just begun," said Hussein Sayed, Chief Market Strategist at FXTM.
Skittish investors fear the escalation of trade conflict between the US and China, with uncertainty driving the trend towards stock sales this month.
Until August, the Dow fell by over 5% and the S&P 500 fell by over 4%. Add concerns about Brexit, Italian politics and political unrest in Hong Kong, and the background for stock markets is as difficult as any time after the global financial crisis about a decade ago.
"The fact is that nobody really knows what the prospects are for the markets," said Fiona Cincotta, senior market analyst at City Index. "However, the signs that flash from the markets are not large."
At present, the expectations that the US Federal Reserve and other central banks would have responded decisively to the warning of the recession have helped world stocks to stabilize.
But that recovery was interrupted by the latest Beijing rhetoric
"The only game in the city is central banks, so bond markets are gathering," said Peter Schaffrik, a global macro strategist at RBC Capital Markets.
"We have regional bonfires in Hong Kong, Argentina, Japan against South Korea, and none of these are going away easily; everyone is not necessarily strong enough to cause problems. "
Money markets assess the increasing probability that the Fed will cut rates by half a point during the September meeting.
"We saw that the shares were traded very badly due to the inversion of the yield curve, so some additional warning lights will flash for the Fed that need to do more," said Andrea Iannelli, Fidelity's investment director International.
"The only question is: can the Fed outperform the market? At the very least, they will have to meet short-term market expectations. "