U.S. Futures, Stocks Slide as Trade Tensions Flare: Markets Wrap

• Treasuries advance with Europe government bonds; gold rebounds
• White House discussing possible curbs on investing in China

 

 

 

 

Here are the main moves in markets:

Stocks

• Futures on the S&P 500 Index fell 0.6% as of 8:32 a.m. New York time.
• The Stoxx Europe 600 Index sank 0.9%.
• The U.K.’s FTSE 100 Index declined 0.3%.
• The MSCI Asia Pacific Index increased 0.7%.
• The MSCI Emerging Market Index increased 0.2%.

Currencies

• The Bloomberg Dollar Spot Index declined 0.1%.
• The euro gained 0.2% to $1.0991.
• The British pound declined 0.5% to $1.2226.
• The Japanese yen strengthened 0.4% to 106.86 per dollar.

Bonds

• The yield on 10-year Treasuries decreased five basis points to 1.51%.
• Germany’s 10-year yield dipped two basis points to -0.59%.
• Britain’s 10-year yield declined four basis points to 0.416%.

Commodities

• Gold increased 0.8% to $1,505.91 an ounce.
• West Texas Intermediate crude declined 1.6% to $51.92 a barrel.

 

 

Here are some key events coming up this week:

• Fed Chairman Jerome Powell speaks Tuesday on the final day of NABE’s annual conference in Denver; on the following day, minutes are released on the last policy meeting of the Fed’s rate-setting committee.
• The account of the ECB’s last gathering is due Thursday.
• Chinese President Xi Jinping and Indian Prime Minister Narendra Modi reportedly will meet at an unofficial summit.
• The U.S. releases a key measure of inflation on Thursday.

 

 

 

U.S. equity-index futures extended a retreat alongside European stocks on Tuesday as investor optimism over looming trade talks was undercut by news the White House is moving toward possible restrictions on investments into China. Treasuries and gold advanced.

Contracts for the three major U.S. gauges had gained earlier, but they reversed after China said it strongly opposed an American decision to blacklist some of its technology firms over involvement in alleged human-rights abuses. Losses deepened when Bloomberg reported the Trump administration is moving ahead with discussions around possible restrictions on capital flows, with a particular focus on investments made by U.S. government pension funds. Chinese tech companies that trade in America fell in the premarket. The dollar edged lower after a measure of underlying U.S. producer prices posted the biggest monthly drop in more than four years.

The Stoxx Europe 600 Index fell after two days of advancing. The euro climbed as a jump in manufacturing fueled a surprise improvement in German industrial production, while most European bonds tracked Treasuries higher. The pound extended its decline after Boris Johnson told German Chancellor Angela Merkel a Brexit deal is essentially impossible if the EU demands Northern Ireland stay in the bloc’s customs union.

The abrupt escalation in tension between the U.S. and China comes just days before senior representatives resume their effort to resolve a protectionist dispute that has roiled trade and markets for more than a year. Earlier in the day investors were more optimistic following official confirmation People’s Bank of China Governor Yi Gang will join Chinese Vice Premier Liu He at the talks in Washington.

Asian equity benchmarks had jumped from Tokyo and Seoul to Shanghai and Hong Kong, where trading showed little concern about ongoing unrest. The tech-heavy South Korean index led the regional advance after Samsung Electronics Co. earnings beat analyst estimates.

 

Elsewhere, Turkey’s lira stabilized after tumbling Monday in wake of U.S. President Donald Trump threatening to “destroy” the country’s economy if it acts in excess in a military operation targeting Kurdish forces in Syria. West Texas crude fell to about $52 per barrel.