Political Drama In Europe To Push Safe Haven ETFs Higher
Zacks Investment Research | May 28, 2018 11:35PM ET
After a short relief, the global stock market faces woes emanating from Europe.
The latest development in Italy has increased the prospect of another election, reigniting fears of a populist rise in Europe once again. The market anticipates that repeated election may become a de facto referendum on Italian membership of the currency bloc and the country's role in the European Union. The move could trigger fears of a Eurozone meltdown, affecting demand for emerging market goods and services. Meanwhile, Spain is also facing a heightened risk of a snap election as Prime Minister Mariano Rajoy will face a vote of confidence in his leadership on Jun 1.
The developments prompted a second consecutive day of heavy selling in European financial markets. The contagion has spread to other markets across the globe as well.
Coming to America, President’s Donald Trump anti-trade policies are threatening global economic growth. In his latest move, Trump is mulling over slapping tariffs of up to 25% on automobiles imported into the United States based on national security grounds. This could trigger retaliatory measures from auto exporters like Germany, Japan and South Korea and slow down global economic growth (read: Zacks Investment Research
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