Stocks Slide as Investors Weigh Trade; Bonds Gain: Markets Wrap




 

(Bloomberg) -- Stocks in Europe and Asia retreated along with U.S. equity-index futures on Wednesday as investors digested President Donald Trump's latest comments on trade as well as unrest in Hong Kong. Treasury yields dropped.

Banks led the decline as the Stoxx Europe 600 index fell after disappointing earnings from ABN Amro Bank NV. Futures on the S&P 500 also slipped after the underlying gauge closed just shy of a record on Tuesday. Trump added little new insight into the progress of U.S.-China trade talks on Tuesday, but while he said a deal could happen soon he also warned of escalating tariffs if an agreement isn't reached. Most government bonds gained alongside U.S. notes. The dollar edged higher.

Hong Kong's benchmark equity gauge slumped as the city endured a third day of unrest, with lenders including HSBC Holdings Plc and BNP Paribas SA encouraging employees to stay at home as violence continues. Japanese shares retreated along with those in South Korea and Australia. New Zealand's dollar jumped after the country's central bank unexpectedly kept interest rates unchanged.

The conflict in Hong Kong is a reminder of lingering geopolitical risks as the year draws to a close, while trade issues remain far from resolved. The prospect of a deal between the world's two biggest economies has become key to sustaining a rally that drove U.S. stocks to records in recent days. The U.S. and China have yet to announce a new location or time to seal the agreement after an international gathering in Chile was canceled, and it's unclear whether Trump's renewed tariff threats will move things forward.

Later Wednesday, attention will turn to U.S. data on consumer inflation, before Federal Reserve Chairman Jerome Powell addresses Congress.

Elsewhere, gold rose and crude oil edged lower. Emerging-market stocks and currencies declined.

Here are some key events coming up this week:

Earnings season is slowing. Reports are due this week from companies including Tencent, Japan Post Bank, Walmart, and Cisco.Fed Chairman Jerome Powell addresses the Joint Economic Committee of Congress in Washington Wednesday.U.S. CPI and earnings data Wednesday may provide more clues on the Fed's policy pathThursday brings China retail sales and industrial production data.U.S. retail sales on Friday are forecast to rebound in October after unexpectedly falling the prior month.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index declined 0.4% as of 9:23 a.m. London time.Futures on the S&P 500 Index declined 0.2%.The U.K.'s FTSE 100 Index declined 0.3%.The MSCI All-Country World Index decreased 0.3%.The MSCI Emerging Market Index sank 0.8%.

Currencies

The Bloomberg Dollar Spot Index gained 0.1%.The euro was little changed at $1.1014.The British pound dipped 0.1% to $1.2836.The Japanese yen weakened 0.1% to 109.01 per dollar.

Bonds

The yield on 10-year Treasuries sank three basis points to 1.90%.The yield on two-year Treasuries decreased one basis point to 1.64%.Britain's 10-year yield dipped two basis points to 0.778%.Germany's 10-year yield declined two basis points to -0.28%.Japan's 10-year yield fell two basis points to -0.042%.

Commodities

West Texas Intermediate crude declined 0.6% to $56.34 a barrel.Gold climbed 0.3% to $1,463.71 an ounce.Iron ore increased 0.4% to $79.20 per metric ton.

--With assistance from Andreea Papuc.

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net

To contact the editor responsible for this story: Samuel Potter at spotter33@bloomberg.net

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

©2019 Bloomberg L.P.

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