Economy

US Markets Down Before the Opening Bell

A double-whammy took European stock markets down more than 3% each while we were sleeping; we wake up to this affecting the U.S. markets, including a 500-point drop in the Dow 45 minutes before the opening bell. The two hits Europe has taken are a new scandal regarding wide-spread money laundering at some big international banks, along with a second wave of coronavirus infections spreading through the continent.

Between 1999 and 2017, a reported 2100 suspicious activity reports (SARs) were leaked to Buzzfeed and other news outlets, whereby as much as $2 trillion in assets have been laundered by some of the world’s biggest banks, including JPMorgan JPMHSBC HSBCDeutsche Bank DB and Barclay’s BCS. Reports in the U.S. had indicating money laundering has been a part of Russian and Ukrainian oligarchs’ method of doing business, but this practice is also common among major drug dealers, terrorists and other global criminals.

Adding to this scandalous news item, a new wave of Covid-19 has now spread throughout Europe, with peak contagion rates from the UK to the Czech Republic. This has prompted new restrictions in countries like Holland, which had performed relatively well in containing the coronavirus when it first hit Europe. But this will have a notable impact on both the healthcare systems on the continent as well as its overall global expansion.

Finally, news on the homefront has a similarly foreboding vibe: founder of electric vehicle startup Nikola NKLA, Trevor Milton, has suddenly gone to its board of directors and voluntarily stepped down as head of the company. Shares of the fledgling Tesla TSLA competitor — “down the road,” at least — tumbled 30% on the news.

You’ll recall Nikola received a real boost earlier this month with its joint venture with General Motors GM to develop the all-electric Nikola Badger pickup truck, whereby the stock shot up 40%. Just a few days later, a research report claimed that Nikola had actively “misled investors,” which cast a near-term pall over the fortunes of the company. Milton’s stepping down would seem a piece of the latter, and maybe even the former. Is this going to be a major set-back for the upstart auto maker or a step toward GM buying the company outright?


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