Por Geoffrey Smith
Investing.com – Shares are likely to plummet with a cocktail of bad news: the virus is growing again in Europe, while the death of Supreme Court judge Ruth Bader Ginsburg threatens to distract lawmakers from approving a fiscal stimulus package.
Bank shares are under pressure after a weekend report alleging massive complicity in processing illicit funds, while Nikola’s founding president Trevor Milton resigned amid allegations of fraud.
Here’s what you need to know about the financial markets on Monday, September 21st.
1. FinCEN files bring down bank shares
Leaked files from the U.S. Treasury Financial Crimes Enforcement Network have shown that dozens of global banks have failed to monitor and prevent trillions of dollars of suspicious payments that have passed through their systems over the years.
While many of the details are largely historical, the leak, however, contained unpublished material that hit European bank stocks heavily on Monday morning.
Barclays, Deutsche Bank (DE 🙂 and ING (AS 🙂 were particularly hard hit, while HSBC (LON 🙂 not only featured prominently in the leaked files, but was also singled out by the Chinese Global Times as a likely candidate to be placed on China’s official list “untrustworthy entities”, which would expose you to the risk of harmful sanctions on your business in China.
2. Milton, president of Nikola, resigns
Trevor Milton, the founder of electric truck maker Nikola (NASDAQ :), stepped down as chairman after allegations of fraud that are now the subject of investigation by the U.S. Securities and Exchange Commission (SEC).
Milton will be replaced as president by Stephen Girsky, former vice president of General Motors and current member of Nikola’s board. The news comes just two weeks after GM agreed to pay $ 2 billion for a 20% stake in Nikola and said it would partner with the company to manufacture its Badger truck.
Nikola’s shares fell 28% in the pre-market, while GM’s shares fell 3.9%.
3. WeChat ban broken; TikTok remains Chinese
A California federal judge blocked President Donald Trump’s executive order that would have closed the WeChat platform in the U.S. based on the first amendment. The move is a victory for its owner, Tencent Holdings (HK :).
Meanwhile, the Commerce Department has lifted the order banning downloads of the streaming video application TikTok, citing progress in concluding a deal that would make Oracle (NYSE 🙂 and Walmart (NYSE 🙂 minority shareholders in their operations in the United States. United. Trump said on Saturday that he approved such a deal.
ByteDance, the Chinese owner of TikTok, said he would not transfer any technology to any of the companies as part of the deal, undermining Trump’s claim that China would have “nothing to do” with TikTok in the U.S.
4. Shares are expected to open sharply
US stock markets are expected to open sharply lower on Monday, under the weight of a string of news, and suspicions that the death of Supreme Court judge Ruth Bader Ginsburg over the weekend will distract lawmakers from the urgent task to approve a new package of economic support measures.
Reports that the UK is about to impose new restrictions to bring a second wave of the Covid-19 virus under control have also been a factor.
At 8:49 am (GMT), Dow futures were down 509 points, or 1.8%, while the S&P 500 futures contract fell 1.5% and futures fell 1.1%.
Although Nikola’s news has no direct repercussions for the rest of the market, they arrive at a time when fears spread that tech stock valuations reach unsustainable levels.
5. UK announces new restrictions on taming viruses
The UK government is expected to announce new restrictions on public life to contain a sharp increase in Covid-19 cases.
The government’s top scientific adviser, Sir Patrick Vallance, told a news conference that the UK will face 50,000 new cases a day in mid-October if new measures are not implemented now.
Chief medical advisor Andrew Whitty said, however, that the country was going “in the wrong direction”.
UK media reports suggest that the new government measures will largely target the hospitality and transportation sectors. They seem destined to frustrate the government’s other goals of having more people to return to the workplace and to eliminate the national leave scheme starting in October. The pound sterling fell 0.5% against the dollar in response.