The International Consortium of Investigative Journalists started an investigation into JPMorgan, Deutsche Bank AG, and HSBC Holdings Plc. The Consortium stated that some global banks kept profiting from influential and dangerous players in the past two decades. Among these financial institutions were JPMorgan and HSBC. They continued gaining even after the United States imposed penalties on the banks.
Financial institutions’ internal compliance officers discovered suspicious transactions, indicating money laundering or other criminal activity. More than $2 trillion has been exchanged in those transactions between 1999 and 2017.
How did this news influence the stock market?
Stock markets ended in the red on Monday due to the report detailing more suspicious transactions at global banks. Meanwhile, investors worry about the outlook for American tech stocks. Blue-chip technology stocks could remain under pressure until lingering optimism normalizes – stated Julian Emanuel, a strategist at BTIG LLC.
The Stoxx Europe 600 Index tumbled down by 2.7%, and the MSCI Asia Pacific Index plunged by 0.8%. Futures on the S&P 500 also dropped by 1.7%. Contracts on the S&P 500 indicated that the benchmark gauge could lose more on a fourth consecutive day. On the other hand, Treasuries and the dollar increased.
JPMorgan Chase & Co., Bank of America Corp. And Citigroup Inc. plummeted down by at least 3.6% in premarket trading. But travel companies traded in the red due to fears of more coronavirus restrictions. American Airlines Group Inc. and Carnival Corp. suffered the most.
Oil dipped as Libya signaled the resumption of some crude exports. Meanwhile, Nikola Corp. slid after the electric-vehicle startup stated that its founder stepped down as executive chairman days after the reports said that the company was the focus of U.S. regulators’ investigations.
Virus cases surge in the U.S. Scott Gottlieb, the former Food and Drug Administration Commissioner, said that the U.S. might experience at least one more cycle of the infections in the fall and winter. U.S. deaths related to Covid-19 approached 200,000.