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Market pain; Italy turmoil; Trade war fears

1. Market turmoil: Global markets were mixed Wednesday following a selloff sparked by fears over Ita...

Posted: May 30, 2018 11:51 AM
Updated: May 30, 2018 11:51 AM

1. Market turmoil: Global markets were mixed Wednesday following a selloff sparked by fears over Italy's escalating political crisis and renewed US-China trade tensions.

Asian markets were hit badly by the uncertainty, with Japan's Nikkei closing down 1.5%. Hong Kong's Hang Seng shed 1.4%, while China's Shanghai Composite dropped 2.5%.

European markets opened mixed, with Italy's benchmark index advancing 1% following several days of heavy losses.

US stock futures were pointing higher.

The Dow slumped 1.6% on Tuesday, the S&P 500 dropped 1.2% and the Nasdaq shed 0.5%. Banks were the biggest losers, with Citigroup, Bank of America and JPMorgan Chase sliding 4%. Morgan Stanley declined 6%.

2. Italy in crisis: Italy will test the faith of investors on Wednesday when it tries to sell -6 billion ($7 billion) of government bonds.

Italy is heading for new elections after populist politicians failed to form a government, and the vote could turn into a de-facto referendum on the euro.

Investors are worried that political turmoil in Italy could cause pain beyond the country's borders. Yields on Spanish, Portuguese and Greek debt have surged.

Italian bonds prices have crashed in recent days, but were steadier early Wednesday. The auction will conclude at 5:00 a.m. ET.

3. Trade war back on: The White House announced Tuesday that it would impose 25% tariffs on $50 billion worth of goods from China, and place new limits on Chinese investments in US high-tech industries.

The world's two biggest economies held two rounds of trade talks this month. They agreed China would "significantly increase" purchases of US goods and services to reduce their trade imbalance, a top Trump administration demand, and pledged to continue talks.

In a statement, China's Commerce Ministry said the announcement is "obviously in violation" of the recent agreement.

Beijing has previously pledged to retaliate against the 25% tariffs.

4. The Volcker Rule decision time: The US Federal Reserve will meet to discuss possible changes to the Volcker Rule, a controversial part of Wall Street reform following the financial crisis.

The rule prevents banks like Goldman Sachs or JPMorgan from making risky wagers with their own money, and also from owning big stakes in hedge funds or private equity firms.

Wall Street has complained about the rule for years.

5. Martin Sorrell is back: Martin Sorrell says he has taken control of Derriston, a listed shell company in London.

The reverse takeover deal will see Derriston transformed into S4 Capital, a "multi-national communication services business," according to an announcement.

In April, Sorrell resigned from ad agency WPP after three decades as CEO amid an investigation into "personal misconduct."

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6. Companies and economics: Dick's Sporting Goods, DSW, Michael Kors and Sears Holdings will release earnings before the open. Guess? will follow after the close.

Salesforce shares jumped higher in extended trading after the company reported better than expected earnings.

Markets Now newsletter: Get a global markets snapshot in your inbox every afternoon. Sign up now!

7. Coming this week:
Wednesday - Amazon, Exxon Mobil, Twitter, Walmart annual shareholder meetings; Fed discusses Volcker Rule
Thursday - Facebook annual shareholder meeting
Friday - May jobs report

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Scott257433
Olmsted244628
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Martin40810
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Itasca32814
Pine3280
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Polk3054
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Iowa Coronavirus Cases

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Confirmed Cases: 85533

Reported Deaths: 1305
CountyConfirmedDeaths
Polk15872262
Woodbury544764
Johnson512627
Black Hawk448990
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Story344417
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Scott301128
Dallas278538
Pottawattamie211338
Buena Vista199112
Marshall178434
Sioux16183
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Webster125514
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Clinton112121
Muscatine110855
Crawford10885
Cerro Gordo105721
Warren9566
Jasper83832
Des Moines7848
Marion7637
Henry7434
Tama71331
Carroll6625
Lee6377
Wright5811
Dickinson5276
Boone5078
Bremer4927
Washington45911
Louisa42915
Mahaska41219
Delaware4023
Floyd3493
Jackson3493
Franklin34818
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Clay3264
Lyon3264
Hamilton3223
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Winnebago30313
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Jones2743
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Clayton2523
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