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European Shares Slide as the Trump Rally Stalls

By:
David Becker
Updated: Mar 22, 2017, 11:48 UTC

European stocks are selling off as markets reverse Trump rally. The healthcare bill is in trouble, since this was the first bill to advance to the congress

European Shares Slide as the Trump Rally Stalls

European stocks are selling off as markets reverse Trump rally. The healthcare bill is in trouble and since this was the first bill to advance to the congress, investors are concerned that it will be a while before pro-growth policies such as corporate tax cuts make their way to the house and senate floors. European markets turned negative late on Tuesday and Asian equities were in free fall. Japan saw the biggest slump in stocks since the U.S. presidential election and the Nikkei closed with a 2.13% loss as the break of key technical levels has raised fears of further swings ahead.

The ASX was down 1.56% at the close, the Hang Seng lost -1.11%. The selloff continued during the European AM session and the DAX is down -0.44% and hovering near the 11900 mark. The FTSE 100 is underperforming with a -0.80% loss there is no end to the selling in sight as U.S. stock futures also head south again. Oil prices are also down with WTI trading below USD 48 per barrel.

WTI is down 1.5% at 47.62, which is 10 cents above the intraday low. Yesterday’s low is at 47.23, and the four-month low of last week is at 47.09. Weekly data from API showed U.S. inventories to have risen by 2.4 million barrels last week, compared to expectations of a 2.8-million-barrel increase. Traders await Wednesday EIA inventory reported. This comes amid a risk off theme in global markets as the Trump trade unwinds some, which has been impacted sentiment in crude markets over the last couple of sessions.

Eurozone Current Account Narrows in January

Eurozone current account surplus narrows as higher oil prices cut into nominal trade surplus. Seasonally adjusted data for January showed a surplus of EUR 24.1 billion, down from EUR 30.8 billion in the previous month, as the goods surplus slipped to EUR 24.1 billion from EUR 31.6 billion. German data already indicated that much of the improvement in the trade surplus was due to lower oil prices, which cut the nominal import bill, but with import prices now rising sharply, the trade surplus and thus the current account surplus are being scaled back.

ECB’s Villeroy said that accommodative policy is still needed. The French central bank head said the central bank warded off the “mortal danger of deflation” and is now clearly processing toward its inflation goal as the economic outlook is improving despite uncertainty. At the same time, however, he added that the accommodative policy is still needed. In line with the official ECB statement and highlighting that those pushing for a discussion of exit strategies are still in the minority at the central bank.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

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