Tuesday’s political turmoil continued a difficult start for weak markets, particularly in already fragile euro zone indexes. The well-documented and precedent-setting rejection of the suspension of the British parliament set off the uproar, but the United States, not to be outdone, also launched a long-awaited impeachment inquiry later that day. There will no doubt be more suffering before the market turns around, and we’ll have to wait and see how much of Donald Trump and Paul Manafort’s dirty work in Ukraine is uncovered before the impeachment inquiry concludes. Dew.
Conor Campbell, financial analyst at Spreadex, said of the market opening:
“There’s too much going on in the market right now and it’s another difficult start for everyone involved.”
“On Tuesday, Britain and the United States appeared to be playing a bizarre game of one-on-one over which country would be in the greatest political turmoil. First, the Supreme Court ruled that Boris Johnson’s prorogation of parliament was illegal. And that night, Nancy Pelosi announced the long-awaited impeachment inquiry into Donald Trump, a turning point. The ongoing Ukraine scandal.
“And for investors who prefer safe, stable politics rather than constant flameouts, that’s a problem. Overnight, the Dow Jones fell to a two-week low of 26,850, setting the tone for Wednesday’s European Open. Ta.”
“DAX, already having a tough week due to Monday’s manufacturing PMI migraine, fell another 0.6%, falling below 12250 for the first time since September 10. Meanwhile, CAC fell 0.8% to 5580. ”
“Interestingly, after the bell there was a rare agreement between the FTSE and the pound. The UK index also fell by 0.5%, with the US and eurozone compatriots also hitting two-week lows in the process. This was despite Sterling abandoning its pop after yesterday’s Supreme Court ruling. Cable fell 0.4% and the pound fell 0.2% against the euro.
“Needless to say, the next steps in the resumption of Parliament in the UK and the impeachment turmoil in the US will be closely watched by nervous investors.”
Elsewhere in market and macroeconomic news, we also provide the latest updates, including: Supreme Court judgment, Thomas Cook collapse (LON: TCP), ECB stimulus, London Stock Exchange (LON: LSE) bid, Lloyds Banking Group PLC (LON: LLOY), Joe Johnson ‘s resignation, Hilary Benn’s Brexit Delay Bill, Barclays (LON: BARC) and Deutsche Bank (ETR: DBK).
