NEW YORK, May 17 (Reuters) – U.S. stocks and the dollar dropped and bond prices rallied on Wednesday as investors fled risky assets amid uncertainty about U.S. President Donald Trump’s ability to deliver on tax and regulatory reform.
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World stock markets slid Thursday on fears that a growing crisis surrounding US President Donald Trump could lead to his impeachment and shatter any chances of his economy-boosting agenda being implemented.
Investors will watch with renewed focus next week’s testimony to the Senate by former FBI Director James Comey.
The 10-year yield declined further today, falling to a 4-week low of 2.181%.
At almost 18 times forward earnings, the S&P 500 trades at a significant premium to its long-term average valuations of 15 times, according to Thomson Reuters data.
American investment banking giants Goldman Sachs, Bank of America, and Morgan Stanley saw their shares decline 5.3 percent, 5.9 percent, and 5.6 percent, respectively.
“Rising doubts about US political leadership should fuel further rotation into Europe”.
Wall Street futures pointed to more, albeit modest, falls for the S&P 500, Dow and Nasdaq markets when they reopen later. The string of news headlines from the White House, however, kept traders on edge.
He warned, however, about joining the buying spree.
There was more support for the euro too as one of the European Central Bank’s most influential policymakers, Executive Board member Benoit Coeure, said it should get on with paring back its stimulus once it is convinced inflation has recovered.
Wall Street rebounded on Thursday from its biggest selloff in more than eight months with help from a move to loosen internet regulations and strong economic data.
Trump, barely four months into his four-year term, said a special counsel’s probe would show there was “no collusion” between his campaign and a foreign power.
Yen’s dominant market performance has been pushing Asian stocks to the brink, Hong Kong’s Hang Seng Index suffered a loss of about 0.19%, while the mainland stock, Shanghai Composite loses 0.26% at 3104.74 at 8.22 points; on the other hand, the Shenzhen Composite was surprisingly up by 0.13% at 1867.68 or 2.42 points. The Nikkei Stock Average slipped 0.5% from Tuesday to 19,814.
Stocks were selling off in early morning trade on Wednesday after hitting record highs earlier in the week.
Spot gold rose for the fifth day and was up 1.8 percent at $1,258.28 an ounce by 2:40 p.m. EDT (1840 GMT), after hitting $1.260.20, the highest since May 1.
In Australia, the nation’s currency rose to its highest level against the USA dollar since May 4 after an unexpected fall in Australia’s unemployment rate in April.
Bank notes of different currencies, including Euro, U.S. Dollar, Turkish Lira or Brazilian Reais, are photographed in Frankfurt, Germany, in this illustration picture taken May 7, 2017.
If Trump’s policies are perceived as stagnating, the USA economy will start to soften, said Daisuke Karakama at Mizuho Bank.
Recent data out of the United States has been on the soft side, and without the prospect of an impending growth boost to the American economy from fiscal measures, it would only require one bad jobs report to jeopardise a summer rate hike.
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Both the Dow and the S&P 500 fell below their 50-day moving average for first time since late April.
