Stocks Rise After U.S. Says China Wants Trade Deal: Markets Wrap - Yahoo Finance

Assets Whipsawed by Trade Talk as Tariffs Loom: Markets Wrap

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U.S. stocks, Treasuries and the dollar swung wildly as investors digested a raft of trade headlines two days before Trump administration tariffs are set to take effect.

The S&P 500 erased a gain sparked by White House comments that China is arriving in Washington to make a deal. The benchmark came off session highs on a report that Beijing may take countermeasures if tariffs rise Friday as President Donald Trump threatened. Stocks swooned 2 percent to start the week as trade tensions escalated.

“Volatility in the markets is really headline driven, particularly around the fluid conversations between the U.S. And China,” said Charlie Ripley, a senior investment strategist for Allianz Investment Management. “We’ll have to see how this thing plays out at the end of the week here, but we would continue to expect this environment as long as the headlines are going back-and-forth.”

Beijing’s top trade negotiator, Liu He, is traveling to the U.S. on Thursday and Friday for the high-stakes talks. U.S. officials have said Chinese negotiators reneged in the past week on provisions in a draft deal the U.S. considered settled. The developments raise the prospect that talks between the U.S. and China to resolve their trade war could collapse entirely.

An escalation of Trump’s rhetoric on trade in the past few days appears to have caught global equity markets off-guard. Many had been testing record highs, seemingly priced to perfection on the assumption a deal between the U.S. and China would get done. The likes of JPMorgan boss Jamie Dimon still put the odds of that at 80 percent, and the S&P 500 has only fallen to levels seen a month ago.

Elsewhere, the yuan edged lower as data showed Chinese exports unexpectedly fell in April and imports rose. The New Zealand dollar slumped more than 1 percent as the central bank cut interest rates, though it later pared most of the drop. Oil swung between gains and losses.

In emerging markets, the lira extended losses against the dollar amid the fallout from Turkey’s decision to re-run municipal elections in Istanbul. The South African rand strengthened as the country headed to the polls for a national election.

Here are some notable events coming up:

The U.S. releases trade data Thursday.South Africa holds national elections Wednesday.China reports on inflation Thursday. The U.S. releases the April CPI report Friday.

These are the main moves in markets:

Stocks

The S&P 500 Index was little changed as of 11:42 a.m. New York time, while the Nasdaq Composite Index fell less than 0.1 percent and the Dow Jones Industrial Average was flat.The Stoxx Europe 600 rose 0.2 percent. The MSCI Emerging Market Index dropped 0.5 percent.The MSCI Asia Pacific Index slumped 1.1 percent.

Currencies

The Bloomberg Dollar Spot Index gained 0.1 percent, higher for a third straight day.The euro rose 0.1 percent to $1.1202 while the yen strengthened 0.1 percent to 110.15 per dollar, the fourth consecutive daily increase.The British pound weakened 0.5 percent to $1.3008.The MSCI Emerging Markets Currency Index eased less than 0.1 percent.

Bonds

The yield on 10-year Treasuries fell two basis points to 2.45 percent.Germany’s 10-year yield fell one basis point to negative 0.05 percent.

Commodities

West Texas Intermediate rose 1.4 percent to $62.23 a barrel.Gold dropped 0.1 percent to $1,283 an ounce, declining for the first time in four sessions.The Bloomberg Commodity Index rose 0.3 percent, the first increase this week.

--With assistance from Justina Lee.

To contact the reporter on this story: Sarah Ponczek in New York at sponczek2@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka

For more articles like this, please visit us at bloomberg.com

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https://finance.yahoo.com/news/asia-stocks-face-losses-tariff-214747342.html

2019-05-08 15:43:00Z
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