UK snap election sends European markets tumbling | Calamatta Cuschieri

Tuesday was a busy day for traders and investors alike as European markets reacted negatively to the bombshell news that an early election is to be held in the UK

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Calamatta Cuschieri
19 April 2017, 10:01am
UK Prime Minister Theresa May
UK Prime Minister Theresa May
European markets

Tuesday was a busy day for traders and investors alike as European markets reacted negatively to the bombshell that was dropped by UK Prime Minister Theresa May and her government that an early election is to be held in the UK. The reason behind this decision, should May’s party clinch the victory, would be to provide her government with a greater parliamentary majority so that they may better negotiate their way out of the European Union. May’s announcement had a negative effect on all the major European markets with the FTSE 100 bearing the brunt of the blow as it was down nearly two percent during Tuesday’s trading as the German and French markets were both down 0.59% and 1.21% respectively.

One positive to come out from the shock announcement is the Pound’s performance. The sterling has reached a ten-week higher against the dollar as it increased by 0.85% in Tuesday’s trading session alone.

American markets

American markets opened on a negative note as earnings season is now well underway as Goldman Sachs, Johnson & Johnson and Harley Davidson were all in the red during the early hours of trading. On the political front, US President Donald Trump congratulated Turkish President Recep Tayyip Erdogan on the Turkish referendum result, despite claims by the opposing camp of election fraud, during a forty five minute phone call. The American President also seems to have made another U-turn on his campaign promises as he has softened his stance on starting a trade war with China by imposing import tariffs.

Weetabix finds a new home

The British cereal brand Weetabix has been sold to American consumer group Post Holdings
The British cereal brand Weetabix has been sold to American consumer group Post Holdings
The British cereal brand Weetabix has been sold to American consumer group Post Holdings five years after being bought by the Shanghai-based group Bright Food for $1.76bn. Weetabix, which has been around for 84 years, was originally bought by the Chinese group with the intention of gaining a share of the Chinese cereal market. Weetabix failed to gain any traction with the Chinese consumer’s palate as preference is usually given to savoury and hot foods for breakfast.

Bank of America rebounds

Bank of America has reported an impressive set of results as it posted a rise in quarterly profits for a third successive quarter. Like many other American banks, the recovery of Wall Street post the financial crisis and the interest rate hike by the Federal Reserve as recently as last month, have helped banks and financial firms alike in generating higher returns for their shareholders as the share price has risen by more than 60% in the last year alone.

Goldman Sachs off the mark

Despite an 80% rise in profits, Goldman Sachs failed to beat both analysts’ expectations and also lagged behind its peers. While certain units of the bank, such as debt-trading business and the M&A unit suffered slightly, net revenues posted a 27% increase. Shares in the American investment bank fell by 3% upon the market’s open.

This article was issued by Simon Gauci Borda, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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