Five Things You Need to Know to Start Your Day
Stocks plunge again, Erdogan blames Saudi authorities for Khashoggi as Riyadh conference begins, and Italian fiscal showdown continues. Here are some of the things people in markets are talking about today.
Yesterday’s market bounce in Asia proved short-lived, with most gauges in the region sinking at least 1 percent overnight. The MSCI Asia Pacific Index dropped 2.1 percent, while Japan’s Topix index closed 2.6 percent lower and China’s Shanghai Composite Index – which lead the gains on Monday – ended the session down 2.3 percent. In Europe, the Stoxx 600 Index was 1.4 percent lower at 5:45 a.m. Eastern Time as a slew of bad corporate news added to pain in the region. S&P 500 futures were also falling, the 10-year Treasury yield was at 3.149 percent and gold rallied.
Saudi Arabia’s Future Investment Initiative conference begins today, with the kingdom planning to announce deals on energy and base metals in an attempt to salvage the event hit by the global backlash to the killing of Jamal Khashoggi. Condemnation is unlikely to ease anytime soon, with Turkey’s President Recep Tayyip Erdogan laying the blame for the death squarely at the door of Saudi authorities, dubbing it a planned operation.
While much of the political intrigue in Europe has been focused on the seemingly interminable Brexit debate, the decision on Italy’s budget, likely due from the European Commission today, has the potential to cause further deadlock in the region. Rome has so far refused to change its budget despite requests from senior EU officials, a refusal that could cause the commission to take the unprecedented step of demanding Italy take back, revise and resubmit its fiscal plan.
President Donald Trump is intensifying his campaign ahead of the midterm elections, and continues to make last-minute promises in a bid to ward off Democratic control of Congress. He doubled down on his promise for further tax cuts, saying there would be an additional 10 percent reduction for middle-income families. On defense, he said the U.S. would outspend any other nation in building up its nuclear arsenal, a fresh challenge to Russia and China. He also took a hard line on immigration, saying the U.S. would cut off foreign aid to Guatemala, Honduras and El Salvador as thousands of people march north from the region in search of a better life in America.
U.S. earnings season continues, with economic bellwether Caterpillar Inc. expected to make a strong showing when it posts quarterly results. McDonald’s Corp. and Verizon Communications Inc. will also give their view on the health of the U.S. consumer. Earlier, Apple Inc. supplier AMS AG saw its shares plunge by the most in a decade after its margin outlook disappointed.
What we've been reading
This is what's caught our eye over the last 24 hours.
- GDP report may give Trump a trophy before midterm vote.
- Explosive device found in George Soros’s mailbox.
- Brexit deal or no deal, London’s housing slump is here to stay.
- Europe’s worst currency is still strong a decade after crisis.
- India has already hit a record number of $1 billion startups this year.
- How strong steel might kill off the next big battery story.
- Mars is likely to have enough oxygen to support life.
©2018 Bloomberg L.P.