Saturday , August 17 2019

US futures, Europe stocks slump as Asia advances


US equity futures slipped on Wednesday alongside European stocks as the rebound in global shares struggled for momentum.
Oil declined, while Treasuries advanced with German bonds.
Contracts on the S&P 500, Dow and Nasdaq all swung from a gain to a loss, though Alibaba’s US-listed shares bucked the trend, rising in pre-market trading after beating estimates. The Stoxx Europe 600 fell as drops in carmakers offset gains in food and travel companies. The bright spot was Asia, where a regional equities gauge headed for its biggest one-day increase in six weeks. Mainland China led gains as speculation increased that Beijing will boost stimulus after data showed the economy lost steam.
Treasury 10-year yields sank to the lowest level since March, with investors still reeling from the breakdown in Sino-US trade negotiations in the past week. Yields on similar-maturity German bunds slipped to the lowest since 2016, but they jumped for Italy’s debt, as the nation’s deputy premier Matteo Salvini racheted up tensions over the country’s deficit.
Sustained appetite for risky assets is missing as investors remain on edge following a trade-induced roller coaster for markets. The White House is preparing duties on the remaining $300 billion of Chinese imports, and economists warn the new penalties will eventually weigh heavily on the American economy. President Donald Trump is preparing to meet his Chinese counterpart, Xi Jinping, at next month’s G-20 summit, an encounter that could prove pivotal in the deepening clash over trade.
“It’s just too early to tell if this is a buy, on slightly oversold conditions, or if it’s the start of stabilisation,” Gina Martin Adams, chief equity strategist at Bloomberg Intelligence, told Bloomberg TV in Hong Kong.
“Our working thesis is that we’re going to be in for a period of volatility for most of the next month as we await the G-20 meeting.”
Elsewhere, oil fell as an industry report signalling a jump in US stockpiles eased concerns over a supply crunch, after a drone attack in Saudi Arabia had highlighted the vulnerability of the country’s energy infrastructure.
Earnings this week include Cisco, Nvidia. Bank of Indonesia has an interest rate decision on Thursday.
Futures on the S&P 500 Index dipped 0.2% in New York. The Stoxx Europe 600 Index fell 0.2%.
The Shanghai Composite Index jumped 1.9%. The MSCI Emerging Market Index slipped less than 0.05%. The MSCI Asia Pacific Index increased 0.4% to 155.24, the largest climb in six weeks.
The Bloomberg Dollar Spot Index rose 0.1% to 1,203.56. The offshore yuan weakened 0.2% to 6.9147 per dollar. The British pound rose less than 0.05% to $1.2909. The Japanese yen strengthened 0.2% to 109.38 per dollar. The euro fell 0.1% to $1.1195.
The yield on 10-year Treasuries dropped three basis points to 2.38%. Germany’s 10-year yield slumped four basis points to -0.11%.

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