Major stock indices were looking depressed come Friday, as the events of a politically charged week in August cast aspersions on the stability of America and Europe.
The pan-European Stoxx 600 index was down 0.9% the day after a van plowed into a crowd in Barcelona on Thursday, killing 13 people and injurring 100.
Unsurprisingly, travel and leisure stocks were the hardest hit after Thursday night’s attack.
French hotel firm Accor saw its shares fall 0.9% to €39.02 per share during the aftermath, while Spanish hotel chain Melia Hotels was also down 2.2% at €12.66 per share.
Anglo-Spanish International Airlines Group (IAG) and easyJet sustained the biggest share price losses of the FTSE 100 constituents on Friday.
At the time of writing, easyJet shares were trading lower than shares in IAG, the holding company formed from the merger of British Airways and Iberia, down close to 2% at £12.77p per share, at the time of writing.
The low cost British airliner issued two profit warnings in 2016, following the EU referendum, and wrapped up the first half of 2017 with another headline loss.
While the Barcelona attack acted as a catalyst for market jitters at the end of the week, “issues in Washington are also causing investors huge concern,” said Rebecca O’Keefe, head of investment at Interactive Investor.
President Trump’s handling of last weekend’s clash in Charlottesville, Virginia had sufficiently rattled markets by the end of the week as his off the cuff remarks continued to divide the country.
Business professionals and government personnel from both sides of the political spectrum condemned the president’s reversal on Charlottesville, accusing the commander in chief of drawing a false moral equivalence between the white supremacist organisers of the “Unite the Right” rally and the anti-fascist protestors.
A week before, Trump’s impromptu “fire and fury” threat toward North Korea succeeded in wiping off $1trn from global equity markets.
American stock markets suffered as a result, with the S&P 500 crashing to a one-month low of 2,430.01 on Friday.
The NASDAQ composite closed 1.94% lower on Thursday at 6,221.91.
The Charlottesville remarks also cost him his White House business councils, as one by one CEOs from the mega multinational companies like General Electric and JP Morgan pulled out.
“Markets had originally given President Trump the benefit of the doubt and hoped his abrasive style would cut through the political web and get things done,” O’Keefe continued.
“However, far from being a force for change, seven months into his presidency there has been no noticeable policy success and US politics is more divided than ever.
“Dissolving his infrastructure council before it even began highlights just how volatile the situation is and the question for investors is changing from what support Trump may deliver to markets to what risk he brings.”
