Financial and Economic Brief - October 10, 2017

by © Liberty Publishing, Inc.

New “Bubbles” to Emerge?

According to German Finance Minister, Wolfgang Schaeuble, volatile loans and mounting global debt could lead the world into another economic crisis. He said, “Economists all over the world are concerned about the increased risks arising from the accumulation of more and more liquidity and the growth of public and private debt ...” He cautioned that “new bubbles” could emerge after central banks injected trillions of dollars into the financial markets. Schaeuble also said he was concerned about possible weakness in the euro zone as banks attempted to cope with underperforming loans.

Walmart Announces Buyback

Walmart announced a $20 billion share repurchase program to replace its existing plan and shares were up more than 2% in premarket trade on the news. It will continue to focus on remodeling existing stores and incorporating “digital experiences” in place of building new locations. Walmart said it expects its U.S. e-commerce business to grow sales by around 40% in fiscal 2019. Online transactions grew 60% during the second quarter of this year, Walmart reported in August. CEO Doug McMillon said, “We're combining the accessibility of our stores with e-commerce to provide new and exciting ways for customers to shop.”

Spanish Separation Affects European Stocks

World shares achieved a record high on Tuesday, although European shares traded “cautiously” as markets waited to see whether Spain’s Catalonia region would push for independence. Japan and South Korea returned from extended breaks to give Asia a lift, as Wall Street looked fit to open higher. However, the Catalan uncertainty meant the euro zone’s main bourses and Spanish bond markets spent the day in the red. The euro remained resilient, growing to a one-week high of almost $1.18 as data showed German exports “surged” in August. Traders were still positive after one of the European Central Bank’s German policymakers called for an end to its stimulus.