Stocks Drop in Europe, Asia as U.S. Futures Steady: Markets Wrap




 

(Bloomberg) -- Stocks fell in Europe and most of Asia while U.S. index futures drifted as investors weighed prospects for Federal Reserve policy easing against the backdrop of threats to global growth and lingering trade tensions.

The Stoxx Europe 600 index dropped a fourth day, with real estate and health care among the biggest losers. Futures for the S&P 500 index nudged higher a day after U.S. stocks' largest decline this month, which was triggered when Federal Reserve member James Bullard played down the chances of a 50-basis-point interest rate cut next month. Ten-year Treasury yields climbed above 2%, oil rose to a four-week high on supply concerns, and gold gave up some recent gains. Shares slid in Japan and Australia, while benchmarks in Hong Kong and India edged higher.

Investor caution is returning ahead of a meeting between Donald Trump and Xi Jinping set for Saturday. While the presidents are expected to discuss trade tensions, a major breakthrough is unlikely. Trump's advisers are pushing him not to set a hard deadline, to avoid a repeat of the situation that resulted in last month's breakdown, and Washington may delay new on an additional $300 billion of Chinese imports to give negotiators breathing room. Meanwhile, traders are hoping the Fed will mitigate the impact of the trade war on global growth with deep cuts.

"My biggest concern here is that people think higher tariffs, or the threat of higher tariffs, can be offset by the promise of lower rates," David Kelly, chief global strategist at JPMorgan Asset Management, told Bloomberg TV. "That's not going to work."

Elsewhere, Bitcoin surged above $12,000 for the first time in more than a year, and briefly came within striking distance of the $13,000 mark. New Zealand's dollar fluctuated after its central bank left rates unchanged.

Here are some key events coming up:

The Group of 20 summit is in Osaka, Japan, on Friday and Saturday.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index increased 0.1% as of 9:29 a.m. London time.The Stoxx Europe 600 Index decreased 0.2% to the lowest in more than a week.The U.K.'s FTSE 100 Index fell 0.1%.The MSCI Emerging Market Index declined 0.1% to the lowest in a week.The MSCI Asia Pacific Index sank 0.4% to the lowest in a week.

Currencies

The Bloomberg Dollar Spot Index increased less than 0.05%.The euro declined 0.1% to $1.1361.The British pound fell 0.1% to $1.2679, the weakest in a week.The Japanese yen fell 0.2% to 107.44 per dollar.

Bonds

The yield on 10-year Treasuries advanced two basis points to 2.01%.Germany's 10-year yield gained one basis point to -0.32%.Britain's 10-year yield increased one basis point to 0.801%.

Commodities

West Texas Intermediate crude gained 1.6% to $58.75 a barrel, the highest in four weeks.Gold fell 0.8% to $1,412.02 an ounce, the first retreat in more than a week and the biggest fall in more than two weeks.

--With assistance from Ksenia Galouchko.

To contact the reporter on this story: Laura Curtis in London at lcurtis7@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Robert Brand, Ravil Shirodkar

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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