Trump woes hit market

Trump woes hit market
Turmoil in the White House and US president Donald Trump’s self-inflicted crisis has hit the markets.

A week of week of political upheaval after Trump fired FBI director James Comey, followed by reports he asked Comey to end a probe into his former national security adviser, and also discussed sensitive national security information about Islamic State with Russian Foreign Minister Sergei Lavrov, have sent shares globally and the US dollar heading south.

Asian shares fell for the first time in three sessions with the MSCI Asia-Pacific Index down 0.3 percent and the share market in Australia was hammered with the S&P/ASX 200 index closing down 65 points, or 1.1 per cent, at 5786. While the Australian market was responding in part to America’s political upheaval, it also retreated on the back of low wages growth, consumer confidence falling in the latest monthly Westpac survey and the Budget’s bank tax.

US stocks opened lower with the Dow Jones Industrial Average falling 0.8 per cent, the S&P 500 slumping 0.7 per cent and the Nasdaq Composite Index down 0.9 per cent. It’s been the biggest one-day drop for the S&P in more than a month.

Safe haven investments like gold and the yen rose, reflecting investor uncertainty.

The US dollar has also taken a hit with the Bloomberg Dollar Spot Index down almost 5 percent.

“At best, the press is making mountains out of molehills, and the ongoing scandals in Washington DC may lead to slight delays in reforms for healthcare, tax reform, deregulation, trade etc,” Citi wrote in a note to clients. “At worst, we cannot remove the possibility of impeachment… While that is the case, the dollar will likely look unattractive.”

“I have been asked if he is going to be impeached. I think that is the type of discussion some (investors) are having,” Hans Peterson, global head of asset allocation, at SEB Investments told Reuters.

 



An award winning author and journalist, commentator, lecturer, and speaker, Leon is a freelance business journalist who covers a range of areas including politics, strategy, globalization, leadership and all the big trends ahead. His main skill is summing up all the news that’s around. For the last 30 years, his main focus has been on management issues. He also produces two podcasts for RMIT University, Talking Business and Talking Technology. Leon has worked for Fairfax, News Limited, AAP and the Herald and Weekly Times.