Global stock markets failed to recoup pre-weekend losses yesterday as traders eyed geopolitical uncertainty and hoped for hints from central bank chiefs later this week.
Wall Street equities trod water while markets in Europe and Japan slid, suffering from lingering concern over President Donald Trump’s volatile administration and unclear prospects for achieving economic reform.
Worries over Trump’s stalled economic agenda and upcoming high-stakes Washington fights had hurt global stocks on Friday, with valuations pressured further by the terror attacks in Spain as investors sought haven investments such as the yen and gold.
“Global sentiment remains jittery on exacerbated US political uncertainty and geopolitical concerns, while the Fed’s key Jackson Hole symposium looms on the week’s horizon,” commented Schwab analysts.
The cautious mood on markets comes as investors look to a central bankers’ gathering in Jackson Hole, Wyoming on Friday for hints about a future with less monetary stimulus on both sides of the Atlantic.
“Traders are keen to get more insight into the plans of the two central banks” direct from Federal Reserve chief Janet Yellen and European Central bank president Mario Draghi, Oanda analyst Craig Erlam pointed out.
The Fed is expected to announce next month that it will wind down its near-$4.5tn balance sheet.
And ECB policymakers appear set to unveil in autumn a long-awaited “tapering”, or gradual reduction of its tens of billions in monthly bond purchases.
Meanwhile, major takeover activity within the oil and car sectors failed to lift overall sentiment.
European markets were little moved by French oil giant Total’s announcement that it would buy Maersk oil, a unit of the Danish shipping giant AP Moller-Maersk, for $7.45bn (€6.35bn).
Total shares gained 0.3% , although in Copenhagen AP Moller-Maersk shares won 2.9% in late trading.
Total said the deal would make it the second-largest operator in the North Sea, with substantial operations in Britain, Norway and Denmark.
Elsewhere yesterday, China’s Great Wall Motor signalled an intention to make an ambitious offer to buy all or part of Italian-American car maker Fiat Chrysler Automobiles.
FCA shares jumped 6.9% in Milan.
Asian traders moved cautiously yesterday following fresh turmoil in the White House, with Tokyo ending down 0.4%.
There are fears that Trump’s promises of tax reform and other pro-business measures will not see the light of day, with his support from corporate America damaged by his much-criticised response to a white supremacist rally in Virginia over a week ago.
Hopes that his tax and spending plans would fire up the world’s top economy had helped stoke a rally in global markets and the dollar at the start of the year but that has foundered in recent months.
Upheaval in the US administration continued Friday after Trump’s top adviser Steve Bannon was dismissed – marking the fifth inner circle casualty in just six months – while there has been talk too that his economic adviser Gary Cohn would step down.
Meanwhile, tensions over North Korea which had sent investors fleeing equities and piling into safe haven assets like gold and the yen could flare up again. 
“Tensions surrounding North Korea are still running high, and this week we could see them ratchet up as the US and South Korea will commence their annual 10-day military exercise,” said analyst David Madden at CMC markets UK.
“The North Korean regime are always upset by it, and I would be surprised if we didn’t have some sort of angry reaction from Pyongyang.”




Related Story