Stocks Slide, Treasuries Rally on Trade-War Angst: Markets Wrap: Bloomberg

  • S&P 500 futures, Europe shares pare earlier losses; gold gains
  • Latest moves in trade war keep risk-asset investors on edge

U.S. equity futures slipped alongside stocks in Europe as traders digested the latest salvos in the China-America trade war. Havens were in demand, with 10-year Treasuries and gold advancing.

Contracts on the S&P 500, Dow Industrials and Nasdaq 100 all pointed to a drop at the open, though the gauges pared losses from earlier in the session. In Europe, the Stoxx 600 Index also came off its lows, with gains in food and healthcare shares offsetting declines in banks. Asia equities traded mixed after China extended retaliatory tariffs to cover more than two-thirds of imports from the U.S. on Saturday. With Beijing also reportedly preparing to warn on the risk of studying in America, Treasury 10-year yields fell to the lowest in almost 21 months, and JPMorgan Chase & Co. warned there’s more downside to come. Oil futures fluctuated.

Investors looking to June after global stocks lost nearly $4.4 trillion of value in May

Markets are still smarting from May, a brutal month for most asset classes except bonds, where fund managers sought out the relative safety of Treasuries. June began with no let-up in geopolitical risks, with China accusing the American government of resorting to intimidation and coercion in the now-stalled trade talks. Chinese officials are also planning action against “unreliable” foreign companies, with a list of violators pending.

“We’re in a phase of brinkmanship — it’ll be a difficult month,” Rob Mumford, an emerging market portfolio manager at GAM Investments, said at a roundtable in Hong Kong. “We’re at the maximum pressure.”

Here are some notable events coming up:

  • The U.S. ISM manufacturing PMI is released Monday.
  • U.S. President Donald Trump meets U.K. Prime Minister Theresa May in London Monday.
  • Tuesday sees the Reserve Bank of Australia policy meeting, with many expecting an interest-rate cut.
  • China President Xi Jinping begins a two-day visit to Russia on Wednesday.
  • Theresa May steps down on Friday as leader of the Conservative Party.
  • Friday’s U.S. jobs report is projected to show payrolls rose by 190,000 in May, unemployment held at 3.6%, a 49-year low, and average hourly earnings growth sustained a 3.2% pace.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index decreased 0.4% as of 6:36 a.m. New York time, the lowest in 16 weeks.
  • The Stoxx Europe 600 Index declined 0.2%, the lowest in more than 15 weeks.
  • The Shanghai Composite Index fell 0.3%.
  • The MSCI Emerging Market Index increased 0.9%.

Currencies

  • The Bloomberg Dollar Spot Index gained less than 0.05%.
  • The euro climbed 0.1% to $1.1179, the strongest in a week.
  • The British pound increased 0.1% to $1.2647.
  • The onshore yuan fell 0.1% to 6.908 per dollar.

Bonds

  • The yield on 10-year Treasuries decreased two basis points to 2.10%, hitting the lowest in about 21 months with its sixth straight decline.
  • The yield on two-year Treasuries dipped four basis points to 1.88%.
  • Germany’s 10-year yield fell one basis point to -0.21%.
  • Japan’s 10-year yield gained less than one basis point to -0.093%.

Commodities

  • West Texas Intermediate crude rose 0.9% to $53.99 a barrel, the largest advance in more than a week.
  • Iron ore decreased 1.9% to $96.49 per metric ton, reaching the lowest in more than two weeks.
  • Gold gained 0.9% to $1,317.18 an ounce, the highest in 10 weeks.

By 

— With assistance by Paul Allen, Benjamin Purvis, and Adam Haigh

3 June 2019, 20:41 GMT+10

Source: Bloomberg

 

 

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