Agenda: Investors take profits as uncertainty returns to markets
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The recent brief revival in stock markets has come to a grinding halt, as Donald Trump’s presidency descends into further confusion and the Barcelona attacks revive terrorism fears.
In the US, Wall Street suffered its second biggest drop of the year, with the Dow Jones Industrial Average 1.24% lower – its largest one day fall in three months – the S&P 500 off 1.54% and Nasdaq Composite down nearly 2%. In Asia the Nikkei 225 was down more than 1% and the Hang Seng 0.5% lower. European markets are also expected to open down:
IGSquawk
(@IGSquawk)Our European opening calls:$FTSE 7353 -0.48%
$DAX 12140 -0.52%
$CAC 5116 -0.59%$IBEX 10369 -0.72%$MIB 21669 -0.55%
The negative reaction to Trump’s response to the events in Charlotteville continued with a third business panel scrapped, casting more doubt on the president’s ability to push through any of his infrastructure or tax proposals. So investors were already pulling out of equities and into havens such as the Swiss franc and gold, and the slide intensified once the news of the Spanish attacks began filtering through.
On Trump, Michael Hewson, chief market analyst at CMC Markets UK, said:
For several months US markets have managed to give President Trump the benefit of the doubt with respect to the implementation of some form of fiscal or tax reform, particularly since he appeared to have the support of the business community, and for the most part, many in the Republican Party.
This confidence appears to be slowly melting away given recent events that have taken place in the aftermath of Charlottesville, as US politics descends into parody.
The mass resignations from the President’s business advisory councils followed by their dissolution, and the subsequent heavy criticism from fellow Republicans appears to show a US President more isolated than at any time in his short Presidency….With support peeling away from all sides, investors appear to be coming to the conclusion that the US President is likely to find it even more difficult to achieve anything close to what was expected than was the case at the beginning of this year. This of course then begs the question as to whether he’ll be able to achieve anything at all, at a time when the political cost of continuing to support him rises with each passing day and each tweet storm.
Otherwise it is a fairly quiet end to the week in terms of economic news
Agenda:
- 9.00 BST Eurozone current account
- 10.00 BST Eurozone construction output
- 15.00 BST University of Michigan consumer confidence
- 18.00 BST Baker Hughes weekly rig count
Meanwhile our live blog on the Spanish attacks is here: