By Joyce Yu
Philadelphia, PA–Wall Street opened lower on Wednesday as investors took profit following two straight days of record highs, and the political crisis in Spain intensified.
“The (U.S.) market has been on a slow drift upward, in anticipation of the earnings season coming and the hopes about tax reform,” the Reuters quoted Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City.
“I think you’re just seeing some small profit taking in the absence of new news.”
Led by gains in the shares of airlines, U .S. markets closed at new record highs on Tuesday with the Dow Jones industrial average gaining 0.4%, while the S&P 500 and the Nasdaq both adding 0.2%. The enthusiasm, however, seem to have been lost today with the escalation of political turmoil in Spain which dragged the European markets.
Carles Puigdemont, leader of Catalonia in Spain, told the BBC on Tuesday that his government would unilaterally declare independence by “the end of this week or the beginning of next.” The King of Spain slammed Catalan authorities after hundreds of thousands of protestors took to the streets over the violent police crackdown on Sunday’s contested independence referendum. The main stock market in Madrid dropped by over 2% on Wednesday.
Over in the US market, investors will pay close attention to the appointment of Yellen’s successor as Fed’s chairman.
Advisors to President Donald Trump have given him a final list of candidates, according to a Bloomberg report. Former Fed Governor Kevin Warsh – who has drawn fire from both the left and right – is among the leading candidates. Jeffrey Gundlach, the head of DoubleLine Capital, said that Federal Reserve Bank of Minneapolis President Neel Kashkari will get the job. The greenback has, as a result, retreated from its seven-week high.
For individual stocks, Amazon is faced with a huge tax bill in Europe following an investigation which was opened in 2014. Margrethe Vestager, the EU’s top official in charge of competition, is holding a press conference today.
Google is expected to unveil a new version of its Pixel phone today. Last month, the tech giant announced to pay $1.1 billion for access to smartphone expertise from Taiwanese manufacturer HTC, reaffirming its plans to expand its smartphone business.
The rest of the week is loaded with heavy economic data, culminating in Friday’s nonfarm payrolls report for September.
