March 2, 2018, by Lorcan Roche Kelly
President Donald Trump’s announcement of a 25 percent tariff on steel imports and 10 percent on aluminum imports has been roundly condemned by the international community. Canada, the largest supplier of foreign steel to the U.S., said the measures were unacceptable, while the European Union vowed a firm reaction. The response from China was muted, with Bloomberg’s Chief Asia Economist Tom Orlik pointing out that the measures announced are limited compared to some of Trump’s campaign promises.
The president’s protectionist stance spurred a sharp downturn in U.S. stocks, with the S&P 500 Index briefly falling below its 100-day moving average and closing 1.4 percent lower. Overnight, the MSCI Asia Pacific Index slid 0.8 percent, while Japan’s Topix index closed 1.8 percent lower as steel stocks were hit and the yen rallied following comments from Bank of Japan Governor Haruhiko Kuroda on a possible 2019 stimulus exit. In Europe, the Stoxx 600 Index was 1.4 percent lower at 5:45 a.m. Eastern Time with carmakers and material stocks among the worst hit. S&P 500 futures point to further losses at the open, the 10-year Treasury yield was at 2.806 percent and gold was higher.
Following her vow never to accept the European Union’s draft Brexit agreement published Wednesday, British Prime Minister will today lay out her vision for the U.K.’s future relationship with the trading bloc. In a speech later today she will propose five goals for a successful Brexit negotiation, which will include a deal that will not risk U.K. jobs, and the “broadest and deepest possible agreement” on trade. European Union President Donald Tusk warned May before their meeting yesterday that the U.K. cannot expect a frictionless trade agreement once it is outside the single market.
Wells Fargo, not far enough
The announcement that four Wells Fargo & Co. board members, including three of its longest serving directors, will retire next month has not been enough to appease some of the bank’s harshest critics seeking the removal of all members who were in position when the lender created as many as 3.5 million bogus accounts. Chief Executive Officer Tim Sloan, who has spent much of his time since replacing John Stumpf at the helm saying sorry for the scandal, is still facing a ban on the bank increasing the size of its balance sheet which could see net income fall as much as $400 million this year.
Voters in Italy go to the polls on Sunday in an election that isn’t expected to produce political stability, with forecasts predicting a hung parliament as the most likely outcome. While the return of former Prime Minister Silvio Berlusconi to the political landscape has been one of the big stories of the campaign so far, his bravado belies projections that his four-party coalition is unlikely to secure a majority. With publishing of polls banned for two weeks before the election date, there is a lot of uncertainty over the outcome, while investors are being warned not to place too much faith in early exit polls on election day.