US equity futures extended losses and Asian shares declined on Wednesday as investors nervousness lingered after the latest bout of market volatility. European stocks bucked the retreat, and the dollar advanced with Treasuries.
Contracts on the S&P 500 pointed to a sixth day of losses for the main US gauge, with those on both the Dow and Nasdaq also in the red. A turnaround in China’s markets helped keep the MSCI Asia Pacific Index from slipping into a bear market, though the benchmark edged lower. Retailers were the biggest winners in the Stoxx Europe 600 Index, while Barclays Plc climbed on earnings and Deutsche Bank AG fell after cutting its revenue outlook. The pound weakened on Brexit worries, and European bonds followed Treasuries higher. The euro dropped following disappointing manufacturing data.
Sentiment remains fragile as global shares chart a course for the worst month in more than three years. The cautious mood was further damped by renewed worries over the impact of tariffs after industrial bellwether Caterpillar Inc warned about rising costs due to higher steel prices. European politics is also in focus, with Italian Prime Minister Giuseppe Conte doubling down on his government’s budget and UK Prime Minister Theresa May’s cabinet descending into conflict.
“We’ve come up upon a tremendous wall of worry for US stocks and stocks around the world,” David Kudla, chief executive officer of Mainstay Capital Management, said on Bloomberg Television. “Concern among investors is the deceleration in earnings growth.”
Elsewhere, oil touched the lowest in almost two-months on a pledge by Saudi Arabia to meet any shortfall that materializes from Iranian sanctions. Emerging-market currencies climbed and their shares were steady.
Here are some key events coming up this week:
Earnings season rolls on with notable highlights including Twitter, UBS and Total. Monetary policy decisions are due in Sweden and Canada. ECB policy makers could on Thursday confirm that asset purchases will end this year, reiterating its pledge to keep interest rates at record lows through summer 2019. President Mario Draghi will hold a press conference. US gross domestic product growth may have slowed in the third quarter, yet remained near its best pace since mid-2015, according to forecasts ahead of Friday’s release.
These are the main moves in markets:
The Stoxx Europe 600 Index increased 0.3% as of 10:22 London time, the first advance in more than a week. Futures on the S&P 500 Index declined 0.8%, reaching the lowest in 16 weeks on its sixth consecutive decline. The MSCI All-Country World Index fell less than 0.05%, hitting the lowest in about 13 months with its sixth consecutive decline. The MSCI Emerging Market Index decreased less than 0.05% to the lowest in almost two weeks.
The Bloomberg Dollar Spot Index increased 0.2% to the highest in 16 months. The euro fell 0.4% to $1.1421, the weakest in almost 10 weeks on the biggest fall in a week. The Japanese yen fell 0.1% to 112.56/$. The MSCI Emerging Markets Currency Index gained 0.2%, the biggest rise in more than a week.
The yield on 10-year Treasuries sank four basis points to 3.13%, the lowest in more than three weeks on the biggest tumble in two weeks. Germany’s 10-year yield fell one basis point to 0.40%, the lowest in almost seven weeks. Britain’s 10-year yield decreased two basis points to 1.451%, the lowest in almost seven weeks. The spread of Italy’s 10-year bonds over Germany’s declined five basis points.
The Bloomberg Commodity Index sank 0.3% to the lowest in almost four weeks. West Texas Intermediate crude dipped 0.3% to $66.23 a barrel, the lowest in two months. LME copper climbed 0.1% to $6 204.00 per metric ton. Gold rose less than 0.05% to $1 230.89 an ounce, the highest in three months.
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