How Italy’s political crisis is affecting U.S. stocks
■ By Taj Shorter / City Reporter
The global markets were recently impacted by Italy’s ongoing and worsening political crisis. Italy is the third largest economy within the eurozone and their government bonds took the biggest hit – causing investors to seek money security elsewhere. Many are wanting to stay out of the Italian nation’s troubled assets during this time.
The U.S. Treasurys have in turn taken a major hit with investors moving money around for safekeeping, which is evident in the fact that the U.S. 10-year yield is down to about 2.87 percent. In a sort of domino effect, the U.S. stock market reaped some consequences when the three biggest indexes also declined this past week. These falls affecting the U.S. markets are bad news for stocks. The S&P 500 went down 0.9 percent and Dow Jones has lost 1 percent.
“JPMorgan, the world’s 10th largest banking company and America’s number 1, went down 3.8 percent.”
And as if the snowball couldn’t grow any larger – the Euro Stoxx banking index went down 4 percent and U.S. banks suffered as well. In particular, JPMorgan, the world’s 10th largest banking company and America’s number 1, went down 3.8 percent. The lower index also did some damage to other large banking companies such as Goldman Sachs.
While some experts and analysts might suggest paying these losses no mind for the time being, it is still enough to keep an eye on. International affairs have a significant influence on the U.S. markets, but sometimes the long-term effects of these losses are less significant than what the short term might indicate. Any future changes in politics could easily escalate or deescalate the current state of affairs.