U.S. Stocks Drop, Bonds Gain on Political Tension: Markets Wrap - Yahoo Finance

U.S. Stocks Drop, Bonds Gain on Political Tension: Markets Wrap

(Bloomberg) -- U.S. stocks slid and Treasuries rose as political unrest in Hong Kong hit markets already on edge over trade tensions. Argentina’s peso sank 15% after the president took a surprise loss in a primary vote.

The S&P 500 Index fell back below 2,900 and is now off 2.8% in August. The overnight session turned sour when authorities closed Hong Kong’s airport and a Chinese official said the city was at a “critical juncture.” The Stoxx Europe 600 Index erased a 1% advance. Argentina’s credit default swap spread spiked higher as investors price in a far greater likelihood of a default. Emerging-market assets slumped.

The weakness in stocks fed demand for haven assets, pushing the 10-year Treasury yield lower and boosting the yen for a fourth day. China’s central bank fixing continued to signal its determination to manage an orderly depreciation. Italian bonds led gains in European debt after Fitch affirmed the country’s credit rating on Friday. The pound strengthened following three sessions of declines.

Monday’s reversals provided another reminder of the fragile mood across markets as it extended the tumultuous start to August. Gains for the safest government bonds show lingering caution by traders who’ve increased bets for central bank easing in recent weeks, as the U.S. and China escalate their trade war and a slew of global data point to slowing growth.

“We remain cautious, as we believe that a number of challenges remain,” said Andrew Sheets, chief cross asset strategist at Morgan Stanley in London. “Among them, the risk that high policy expectations make disappointment more likely, and that even if those aggressive expectations are met, easing isn’t expected to improve growth or inflation materially.”

Here are some key events coming up:

Companies releasing results include China’s Tencent, JD.com and Alibaba, Cisco, Brazilian utility Eletrobras, the U.K.’s Prudential, Australia’s Telstra, giant retailer Walmart, Nvidia, Swisscom and the Danish brewer Carlsberg.The U.S. consumer price index, out Tuesday, probably picked up to a 1.7% annual pace in July, according to economist estimates. Core prices, which exclude food and energy, are seen rising 2.1%.Wednesday brings data on China retail sales, industrial production and the jobless rate.Thursday sees the release of U.S. jobless claims, industrial production and retail sales data.

These are the main moves in markets:

Stocks

The S&P 500 Index fell 0.8% as of 9:55 a.m. New York time.The Stoxx Europe 600 Index dipped 0.2%.The MSCI Asia Pacific Index decreased less than 0.05%.Hong Kong’s Hang Seng Index declined 0.4%.

Currencies

The Bloomberg Dollar Spot Index rose less than 0.1%.The onshore yuan increased 0.1%.The euro climbed 0.1% to $1.1215.The Japanese yen strengthened 0.5% to 105.16 per dollar.The British pound gained 0.5% to $1.2091.

Bonds

The yield on 10-year Treasuries fell seven basis points to 1.68%.Britain’s 10-year yield increased one basis point to 0.495%.The spread of Italy’s 10-year bonds over Germany’s declined five basis points to 2.33 percentage points.Germany’s 10-year yield decreased one basis point to -0.59%.

Commodities

Gold rose 0.5% to $1,504.69 an ounce.West Texas Intermediate crude dipped 0.4% to $54.27 a barrel.LME aluminum climbed 0.3%.LME nickel gained 0.5% to $15,630 per metric ton.

--With assistance from Luke Kawa and Adam Haigh.

To contact the reporters on this story: Samuel Potter in London at spotter33@bloomberg.net;Jeremy Herron in New York at jherron8@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Todd White, Yakob Peterseil

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

©2019 Bloomberg L.P.

Let's block ads! (Why?)

https://finance.yahoo.com/news/stocks-dip-u-drop-caution-212247519.html

2019-08-12 13:31:00Z
CBMiR2h0dHBzOi8vZmluYW5jZS55YWhvby5jb20vbmV3cy9zdG9ja3MtZGlwLXUtZHJvcC1jYXV0aW9uLTIxMjI0NzUxOS5odG1s0gFPaHR0cHM6Ly9maW5hbmNlLnlhaG9vLmNvbS9hbXBodG1sL25ld3Mvc3RvY2tzLWRpcC11LWRyb3AtY2F1dGlvbi0yMTIyNDc1MTkuaHRtbA

Bagikan Berita Ini