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8 News Stories Which Affected The Financial Markets In 2016

News headlines often affect financial markets, whether it is unexpected news like the sudden death of a monarch or a CEO resigning or something we expect to hear like the result of the USA presidential election. Scoop decided to have a look at the top 8 news that caused the financial market to be in turmoil 2016.

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1. Brussels attacks

#BrusselsAttacks stock-market aftermath: Accor -5,71% Air-France-KLM -5,11% Eurotunnel -3,25% EasyJet -4,06% Ryanair -4,34%

In the days after the Brussel attacks on 22nd March, the travelling sector experienced turmoil. Thus, FTSE 350 Travel and Leisure indices, fell with 1.1 percent and some of the airlines were affected, such as Easyjet, Ryanair, and AirFrance.

2. Zika Virus

Shares of US airlines drop after mosquito-borne Zika virus fears take hold; Delta Air Lines stock down 7.4% - Marketwatch

On January 28, 2016, the World Health Organisation announced an outbreak of the Zika virus in South America. As a consequence, people were advised not to travel to the countries in which the virus is spreading. This news had a major impact on the revenues of the airlines operating in these countries. An example of these is the airline Delta Air Lines, which shares declined sharply after it was announced that Zika virus is spreading in Miami at the end of July 2016 and people were advised to avoid visiting Miami. On the 2nd August Delta’s shares were down by 7.4 per cent.

3. Brexit

Today's pound #flashcrash illustrated.

It has been an eventful year for the pound after the Brexit vote. GBP fell with almost 10 per cent the day after the Brexit vote on 24th June 2016 after the uncertainty in the financial markets. The second most dramatic fall of the pound this year occurred on 7th October 2016, when GBP tumbled down with 8 per cent in 8 minutes after the Asia market opened. There were many speculations as to what caused the flash crash, the most discussed of which was a computer algorithm glitch, caused by a statement of the French president Francois Hollande of “hard Brexit”. The comments were published in the FT and it was said that a rogue algorithm reacted on the statement and caused the pound to fall down.

4. Thai King’s death

1997 crisis redux? Thailand's benchmark index SET extends drop and Baht falls most since 2013 amid concern over Kin…

The second week of October was marked by the announcement of the Thai King’ passing away. Thailand’s SET Index plunged with 6.5 per cent in the days after the announcement that the king was in unstable condition. The baht declined with 1.3 per cent during the same week.

5. Dreamworld theme park tragedy

The tragedy in Dreamworld theme park, which happened on 25th October did not only result in the loss of 4 lives but also had financial implications for the company that owns the park. When reports of the incident started coming in, the stock of Ardent Leisure, the owner of Dreamworld fell by 7.8 per cent with a market value of A$1.1 billion ($840 million). Investors reacted almost immediately by selling their shares.

6. Flybe CEO stepping down

On 26th October Saad Hammad said he was stepping down as a chief executive of Flybe. After the announcement, the shares of the company tumbled 14.8 per cent to £34.80 per share.

7. Trump’s Presidential Victory

The Mexican peso has plunged the most since 2008, to the weakest on record vs the dollar.

Although the USA presidential election happened in November, the result of it had a tremendous impact on the financial markets, so we had to include it in the list. The stock markets were expecting Hillary Clinton to be the new president. But after the announcement at the early hours on 9th Nov 2016 that Donald Trump is the 45th president of the USA the financial markets experienced a lot of turmoil. Mexican peso plunged with 12 per cent the lowest ever, FTSE 100 fell by 2 per cent (140 points). The Dow Jones also fell by 2 per cent. This is only a fragment of the reaction of the financial markets, which are still in turmoil.

8. Yahoo’s data breach

Via Google Finance

On 15th Dec, Yahoo discovered a security breached from 3 years ago, which is believed to have enabled hackers to steal the data of 1 billion users. This is the biggest security breach in history, after the Yahoo’s breach of 2012. The company’s stock fell after the announcement with 96 cents, or 2 per cent, to $39.95 per share.

9. And last but not least...Trump's tweets

Although, this is not exactly a news headline, but we could not omit to mention the recent tweets on Donald Trump’s twitter account, which had a major impact on two companies – Boeing and Lockheed-Martin. After all the insulting tweets during the political campaign, now Trump continues tweeting by posting negative comments about different products. First, it was the tweet about Boeing published on 6th Dec, which resulted in Boeing’s stock falling close to one per cent during pre-market trading – dropping from $152.16 per share to $149.75 per share. Then a week later Trump tweeted that the cost of its F-35 fighter jet is “out of control” which had a major impact on Lockheed-Martin. The company abruptly lost $3.5 billion in market value a few hours after the tweet.

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