Overseas Headlines – March 27, 2017


Wall St. to open lower on Trump’s healthcare bill setback
Wall Street was set to open lower on Monday after the defeat of President Donald Trump’s healthcare reform bill cast doubts over his ability to deliver on his agenda of tax cuts and simpler regulations. In a stunning setback, Congress controlled by Trump’s Republican party pulled a bill to overhaul the Affordable Care Act, or Obamacare, on Friday. The bill was Trump’s first major legislative move since taking office in January. "The markets around the globe are falling as a rethinking of the ‘Trump Trade’ begins to focus on reality," Peter Cardillo, chief market economist at First Standard Financial in New York, wrote in a note. "While we don’t expect a full-blown correction to commence at this time, we do see rising negative sentiment replacing the ‘Hope Trade’." The dollar, which had found favor on the possibility of tax cuts and higher infrastructure spending, hit its lowest since Nov. 11, while prices of safe-haven gold shot up to one-month highs. Banks, which had outperformed in the post-election rally on bets of simpler regulations and higher inflation, were down between 1.7 and 2.3 percent in premarket trading on Monday.

German Business Confidence Increases to Strongest Since 2011
German business sentiment climbed to the strongest since July 2011 in a sign that the economy is sustaining its momentum as revival in global trade trounces fears of rising protectionism.The Munich-based Ifo institute’s business climate index rose to 112.3 in March from a revised 111.1 in February. That beat the median estimate of 111.1 in a Bloomberg survey of economists and prompted banks including UniCredit and Barclays to signal they may raise their growth forecast for Europe’s largest economy. Germany expanded at the fastest pace in five years in 2016, a trend that’s set to continue as the Bundesbank says recent momentum might have been understated. Manufacturing and services output is increasing at the fastest pace in almost six years and unemployment is at a record low — factors that could contribute to stronger growth in the coming months even as political events such as U.S. policies, Brexit, and French elections continue to pose risks.


China Jan-Feb industrial profits surge most in nearly 6 years as commodities rally
Profits of Chinese industrial firms surged almost 32 percent in the first two months of 2017 — the fastest pace in nearly 6 years — as prices of commodities from coal to iron ore raced higher. Stronger earnings could give a further boost to fixed-asset investment, which quickened early in the year, and give China’s "smokestack" industries more cash flow to start whittling away at a mountain of debt — a top government priority this year. Total industrial profits over the first two months of the year were 1.01 trillion yuan ($147 billion), the National Bureau of Statistics said in a statement on Monday. The increase was mostly due to faster growth in prices of coal, steel and crude oil, He Ping, a statistics bureau official, said in a note accompanying the statement.