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U.S. stocks fell the most in three weeks as weak manufacturing data and renewed concern on trade rattled markets adjusting to the Federal Reserve’s signal that it’s done easing. Treasuries, gold and the yen rose.
The S&P 500 slipped after a regional manufacturing gauge missed estimates and jobless claims rose more than forecast. The index was under pressure following a Bloomberg report that Chinese officials have warned they won’t budge on the thorniest trade issues, though President Donald Trump eased the blow by signaling a signing ceremony for a partial deal will happen in November. Apple Inc. and Facebook Inc., two of the four biggest U.S. companies, rose after earnings, preventing steeper losses in the major averages.
In other stock moves:
Kraft Heinz surged after it beat expectations.Wayfair plunged after its forecast missed.Hanesbrandes sank on weak earnings.Twilio tumbled when its sales outlook fell short of predictions.Twitter slumped following a decision to drop political ads.Facebook rose 4.1% and and Apple added 1.9%.Ten of 11 S&P 500 sectors slumped.
Treasuries extended a rally that began Wednesday after the Federal Reserve cut rates and signaled it won’t consider raising them until inflation picks up. The 10-year yield slipped below 1.75%, as the bond market remains unconvinced the central bank is done easing, pricing in another cut by July. Data showed the Fed’s preferred inflation gauge matched the slowest pace since 2016, while U.S. consumer spending trailed forecasts.
While the Fed’s signal that it won’t rush to raise rates buoyed risk assets Wednesday, the weak economic data and fresh trade uncertainty reminded investors the central bank also has no intention of easing further after three straight cuts.
“There was a lot of complacency building in around trade over the last several weeks and China is reasserting a posture saying we’re not anywhere close to done,” Michael Purves, chief executive officer at Tallbacken Capital Advisors LLC, said by phone. “That’s why the market is off today and Treasuries are rallying. It’s not about some reinterpretation of what Powell said and did yesterday. If Powell is less inclined to underwrite the trade war, then sure that’s a potential risk factor.”
The euro fluctuated after data showed the region’s economy performed better than economists forecast in the third quarter. The pound rallied as campaigning for the U.K. election began in earnest.
Earlier in Asia, stocks slipped in Shanghai and rose in Hong Kong before data showed its economy fell into a recession in the third quarter. Shares edged higher in Tokyo, where the Bank of Japan dropped its time frame for forward rate guidance.
Here are some key events coming up this week:
Earnings include: Exxon Mobil and Macquarie Group on Friday.Friday brings the monthly U.S. non-farm payrolls report.
These are the main moves in markets:
Stocks
The S&P 500 Index lost 0.6% as of 10:42 a.m. New York time.The Nasdaq 100 slid 0.4%.The Stoxx Europe 600 Index decreased 0.4%.The Shanghai Composite Index fell 0.3%.The MSCI Emerging Market Index lost 0.2%.
Currencies
The Bloomberg Dollar Spot Index decreased 0.1%.The euro slipped 0.1% to $1.114.The British pound increased 0.3% to $1.2937.The onshore yuan jumped 0.2% to 7.042 per dollar.The Japanese yen jumped 0.7% to 108.11 per dollar.
Bonds
The yield on 10-year Treasuries declined eight basis points to 1.69%.The yield on two-year Treasuries dropped six basis points to 1.54%.Germany’s 10-year yield decreased six basis points to -0.417%.Britain’s 10-year yield fell eight basis points to 0.61%.Japan’s 10-year yield decreased two basis points to -0.133%.
Commodities
West Texas Intermediate crude declined 2.3% to $53.84 a barrel.Iron ore dipped 1.1% to $80 per metric ton.Gold futures surged 1.3% to $1,516.50 an ounce.
--With assistance from Katherine Greifeld and Yakob Peterseil.
To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.net
To contact the editor responsible for this story: Samuel Potter at spotter33@bloomberg.net
For more articles like this, please visit us at bloomberg.com
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https://finance.yahoo.com/news/asia-stocks-look-gain-treasuries-214323358.html
2019-10-31 13:57:00Z
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