Sharechat Logo

While you were sleeping: Trump depresses stocks

Tuesday 31st January 2017

Text too small?

Equities slid on both sides of the Atlantic amid the uncertainty created by US President Donald Trump, who has riled national and corporate leaders with moves to implement alienating protectionist and isolationist policies including an immigration order.

US Treasuries and gold rose. 

“Global risk sentiment appears to have been jolted somewhat by the weekend focus on President Trump’s moves on immigration,” Scotiabank strategists led by Shaun Osborne in Toronto noted, Bloomberg reported. “The focus on US political developments may restrain for now the underlying bid” for US assets.

Wall Street weakened. In 1.22pm trading in New York, the Dow Jones Industrial Average dropped 0.9 percent, while the Nasdaq Composite Index shed 1.1 percent. In 1.07pm trading, the Standard & Poor’s 500 Index slid 0.9 percent.

"The market is reacting negatively right now because of the uncertainty that it creates," Robert Pavlik, chief market strategist at Boston Private Wealth, told Reuters. 

"If it can pull more Republicans off of the President's following and maybe weaken his strength in Congress then you start to wonder about the other initiatives that may not get passed," Pavlik noted.

The Dow fell, led by declines in shares of Caterpillar and those of DuPont, recently 2.1 percent and 1.9 percent weaker respectively. Bucking the trend were shares of Wal-Mart, up 0.9 percent in early afternoon trading. 

Corporate leaders including Google’s Sundar Pichai, Apple’s Tim Cook, Facebook’s Mark Zuckerberg, Tesla’s Elon Musk, General Electric's Jeff Immelt and Goldman Sachs' Lloyd Blankfein were among those voicing concern about Trump's executive order, signed on Friday, banning arrivals from seven predominantly-Islamic countries.

Trump’s move is “not a policy we support,” Goldman Sachs CEO Lloyd Blankfein said in a voicemail Sunday to employees, Bloomberg reported. Seeing possible “disruption to the firm,” Blankfein said Goldman will work to help people and families affected. “Being diverse is not optional. It is what we must be,” he said.

BlackRock executives including CEO Larry Fink sent a memo to staff on Monday saying Trump's order presented "challenges" to its goals of diversity and inclusion, Reuters reported. BlackRock is examining the direct impact on its employees, as well as the broader implications of the order, they said.

"We, of course, all want to promote security and combat terrorism, but we believe it needs to be done with respect for due process, individual rights and the principle of inclusion," BlackRock executives wrote.

In Europe, the Stoxx 600 Index ended the day with a 1.1 percent drop from the previous close.

The UK’s FTSE 100 Index fell 0.9 percent, while France’s CAC 40 Index and Germany’s DAX Index each retreated 1.1 percent.

“It’s been a disappointing start to the week as we head towards the end of January, as investors digest the latest executive order from US President Donald Trump, which has prompted large scale selloffs across the board for European stocks as concerns rise that the US may become a much less predictable place to do business,” Michael Hewson, an analyst at CMC Markets in London, wrote in a note, according to Bloomberg.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares follow Asian markets higher on renewed hopes for China-US resolution
Housing Ministry head hints he acted against departed KiwiBuild head Stephen Barclay
NZ dollar heading for 1% weekly slide as outlook weakens
Currency frozen in multi-million dollar Cryptopia theft
NZ manufacturing activity hits highest level since April
Tilt affirms guidance; Dec qtr production misses long-term expectations
NZ dollar extends slide as Philly Fed lifts sentiment in US
January 18th Morning Report
MARKET CLOSE: NZ shares get further lift from positive offshore markets
NZ dollar extends decline amid mixed data

IRG See IRG research reports