Top 5 Things to Know in the Market on Thursday
1. More Trump drama as White House turmoil deepens
Michael Flynn and other advisers to Donald Trump’s campaign were in contact with Russian officials and others with Kremlin ties in at least 18 calls and emails during the last seven months of the 2016 presidential race, according to a new report, citing current and former U.S. officials familiar with the exchanges.
That was only the latest worry in a tumultuous week at the White House, which included allegations that the president tried to interfere with a federal investigation and shared classified information with Russia’s foreign minister.
The Justice Department on Wednesday appointed former FBI director Robert Mueller as special counsel to take over the investigation of Russia’s alleged interference in the U.S. presidential election.
The recent string of controversies intensified doubts that Trump would be able to follow through on his campaign promises for tax cuts, deregulation and fiscal stimulus.
2. Dollar struggles to recover from worst day in almost a year
The dollar wallowed near six-month lows against a basket of major currencies on Thursday, struggling to recover from its worst losses in almost a year against the yen and the euro as worries over the Trump presidency weigh.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up less than 0.2% at 97.52 by 5:55AM ET (09:55GMT). It slid to an overnight low of 97.28, levels last seen in the immediate aftermath of Trump’s surprise victory in November.
Against the safe-haven yen, the dollar slid to a three-week low of 110.30, before bouncing back slightly to 110.35 yen, down more than 0.4%.
Meanwhile, the euro hit a six-month high of 1.1172 against the greenback, and last stood at 1.1120.
3. Global stocks extend slump amid Trump jitters
Global stock markets were under pressure for a second consecutive session on Thursday, amid concerns over the scope of an investigation of U.S. President Donald Trump’s ties to Russia.
Most Asian indexes closed in negative territory, with Japan’s Nikkei ending down around 1.3%, while China’s Shanghai Composite shed about 0.5%.
In Europe, stocks across the continent suffered for the second day in a row, with Germany’s DAX down around 1% in mid-morning trade, while London’s FTSE 100 slumped 1.5%.
On Wall Street, the blue-chip Dow futures pointed to a loss of 120 points, or around 0.6% at the open, the S&P 500 futures dipped 12 points, while the tech-heavy Nasdaq 100 futureslost 27 points.
There are a couple of economic reports Thursday, including weekly jobless claims and the Philadelphia Fed survey both due at 8:30AM ET (12:30GMT).
Odds for a June rate hike have fallen sharply in recent days, according to Investing.com’s Fed Rate Monitor Tool, as political turmoil and a string of soft data saw investors temper expectations for more rate hikes.
4. Oil slides as investors weigh U.S. drilling, extended OPEC cuts
Oil slumped on Thursday, as the market weighed rising U.S. shale production against ongoing efforts by major producers to cut output to reduce a global glut.
U.S. crude was at $48.18 a barrel, down 90 cents, or around 1.8%, while Brent lost 97 cents to $51.24.
The U.S. Energy Information Administration said Wednesday that crude oil inventories fell by 1.8 million barrels in the week ended May 12, the sixth weekly decline in a row.
However, the drawdown came in below expectations for a drop of 2.3 million barrels, underlining the view that an ongoing rebound in U.S. shale production is derailing efforts by other major producers to rebalance global oil supply and demand.
5. British pound rises above $1.30 for first time in 8 months
The British pound on Thursday rose above the 1.30-level against the dollar for the first time since September, following a better-than-expected reading on U.K. retail sales.
Sterling was changing hands at 1.3035 against the dollar, up 0.5% (GBP/USD). It traded as high as 1.3046 intraday, a level not seen since September 29, after data showed U.K. retail sales grew by 2.3% on the month in April, well above expectations.