Wednesday , October 17 2018

US stocks decline as bonds gain; pound under pressure

epa06256311 A mixture of old round one GBP pound coins and new twelve sided versions in London, Britain, 10 October 2017. From 16 October 2017, the round 1 GBP pound coin will no longer be legal tender as it is fully replaced by the 12-sided version.  EPA-EFE/NEIL HALL

Bloomberg

US stocks fluctuated as a global risk-off tone pushed Treasuries and the dollar higher. The pound weakened amid renewed political pressure on UK PM Theresa May.
The S&P 500 Index was mixed as consumer shares pulled the measure up from its session lows. Sovereign bonds advanced, led by British gilts. The sterling slid against all
G-10 peers after a report showed dozens of conservative lawmakers agreed to sign a letter of no confidence in May. Bitcoin clawed back most of its losses after a big intraday slump.
It looks like a busy week for investors. US inflation and growth numbers that could influence the Federal Reserve’s decision on future rate hikes are on the docket. American tax legislation may also play into market thinking after pessimism over the likelihood of successful reforms helped drag global equities down from this month’s record high last week.
Elsewhere, measures of equity-market volatility have risen, albeit from low levels. Gold and most industrial metals rose, and West Texas oil fluctuated before heading higher.
This week’s data include GDP reports for Japan, Germany, Italy and the euro area, CPI in the US, UK and Spain, retail sales and industrial output in China, along with Aussie jobs and wages. Mario Draghi, Janet Yellen, Mark Carney and Haruhiko Kuroda appear at an ECB conference on monetary policy communication. BOE officials address the bank’s future on Thursday, while Draghi speaks a second time on Friday. A string of Fed appearances may further illuminate the FOMC’s commitment to a December hike. Oil executives are gathering in Abu Dhabi to jostle for access to the Emirate’s oil riches.
The S&P 500 Index dipped 0.3 percent as of 9:35 am New York time. The Stoxx Europe 600 Index sank 1 percent, touching the lowest in almost seven weeks with its fifth consecutive decline. The MSCI All-Country World Index decreased 0.3 percent to the lowest in two weeks. The UK’s FTSE 100 Index declined 0.2 percent to the lowest in more than six weeks. Germany’s DAX Index sank 1 percent to the lowest in almost three weeks. The MSCI Emerging Market Index dipped 0.5 percent to the lowest in two weeks.
The Bloomberg Dollar Spot Index climbed 0.2 percent. The euro gained less than 0.05 percent to $1.1667, the strongest in almost three weeks. The British pound fell 0.9 percent to $1.3083, the weakest in more than a week on the largest fall in more than a week.
The yield on 10-year Treasuries declined two basis points to 2.38 percent. Germany’s 10-year yield declined less than one basis point to 0.41 percent. Britain’s 10-year yield decreased two basis points to 1.322 percent. Gold advanced 0.1 percent to $1,277.05 an ounce. West Texas Intermediate crude gained 0.1 percent to $56.81 a barrel.
Japan’s Topix fell 0.9 at the close. The Nikkei 225 slid 1.3 percent, the most since May. South Korea’s Kospi index lost 0.5 percent. The Hang Seng Index in Hong Kong climbed 0.2 percent. Country Garden Holdings Co. jumped as much as 11 percent and Sunny Optical Technology Group Co. climbed as much as 5 percent after their inclusion in the index.

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