|Day's Range||21,066.03 - 21,094.91|
|52 Week Range||18,948.58 - 24,448.07|
(Bloomberg) -- Asian stocks were mixed at the open Wednesday after Federal Reserve Chairman Jerome Powell warned the downside risks to the U.S. economy have increased and doubts emerged on progress toward a China trade deal.Japanese shares retreated, while equities in South Korea and Australia opened flat. The S&P 500 Index fell 1% Tuesday as Powell stopped short of signaling a rate cut was imminent. Tech shares were under pressure as a senior Trump administration official said the U.S. won’t accept further conditions on tariffs as part of reopening negotiations and no detailed trade deal is expected at the G-20 summit. Ten-year Treasury yields held around 2%.“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.”Investor caution is returning ahead of the meeting between Presidents Donald Trump and Xi Jinping set for Saturday. The U.S. is willing to suspend the next round of tariffs on an additional $300 billion of Chinese imports while Beijing and Washington prepare to resume trade negotiations, people familiar with the plans said. Markets are betting the Fed will produce deep cuts to rates this year, and Tuesday’s drop on Wall Street underscored investor desire for confirmation on that score.Elsewhere, West Texas Intermediate oil rose after an industry report suggested U.S. crude stockpiles continue to shrink. Bitcoin extended its gains through $11,000.Here are some key events coming up:New Zealand decides on monetary policy Wednesday, with economists expecting no change to rates.The Group of 20 summit is in Osaka, Japan, on Friday and Saturday.These are the main moves in markets:StocksFutures on the S&P 500 Index were flat as of 9 a.m. in Tokyo. The underlying gauge fell 1% Tuesday.Japan’s Topix index fell 0.5%.South Korea’s Kospi opened flat. Australia’s S&P/ASX 200 Index lost 0.1%.CurrenciesThe yen was at 107.21 per dollar.The offshore yuan held at 6.8861 per dollar.The Bloomberg Dollar Spot Index was flat. The euro bought $1.1368.BondsThe yield on 10-year Treasuries edged up to 2%.CommoditiesWest Texas Intermediate crude rose 1.9% to $58.90 a barrel.Gold slid 0.4% to $1,418.18 an ounce.\--With assistance from Sarah Ponczek and Randall Jensen.To contact the reporter on this story: Adam Haigh in Sydney at email@example.comTo contact the editor responsible for this story: Christopher Anstey at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- U.S. stocks fell the most in more than three weeks as Federal Reserve Chairman Jerome Powell warned the downside risks to the economy have increased and Trump administration officials signaled a trade deal at the Group of 20 meeting is unlikely. Treasuries and the dollar advanced.The S&P 500 fell for a third-straight session, the longest streak since May 9, as Powell reiterated the case for somewhat lower interest rates, but stopped short of signaling a cut was imminent. Markets have been pricing in a reduction of nearly 50 basis points in July. St. Louis Fed President James Bullard said a cut of that magnitude seemed unwarranted.Tech shares led losses, with the Nasdaq 100 falling more than 1.7%, after a senior Trump administration official told Bloomberg the U.S. won’t accept further conditions on tariffs as part of reopening negotiations and no detailed trade deal is expected from the leaders’ summit.The two-year Treasury was little changed around 1.73%, while the 10-year dropped below 2%, a level that until last week it hadn’t breached in three years. The dollar rose for the first time in six sessions.With stress between the U.S. and Iran building and the White House apparently playing down hopes of a trade breakthrough when Trump and China’s Xi Jinping meet this week, investors have edged away from risk assets following the recent central bank-fueled rally. The market has been betting the Fed will produce deep cuts to interest rates this year, and comments by officials Tuesday highlighted investor sensitivity to any hints that may not happen.There’s “the short-term headlines related to people watching the G-20 and the potential for any news related to the US-China negotiations. That’s one piece that in the shorter run is making the markets a little uneasy. The other one is related to the geopolitical tensions with Iran,” said Omar Aguilar, the chief investment officer for equities at Charles Schwab Investment Management. “The bigger picture still drives the markets, which is we have lower interest rates coming up and the market continues to place a big bet on a July rate cut by the Fed.”Elsewhere, Drugmaker Allergan surged after agreeing to be bought by AbbVie Inc. Bitcoin extended its gains through $11,000. West Texas oil edged lower as investors weighed escalating tensions between the U.S. and Iran against the possibility of OPEC+ extending production cuts.Here are some key events coming up:MSCI Inc. announces results of its 2019 Market Classification Review on Tuesday, including whether Kuwait gets upgraded from frontier to emerging-market status.The Group of 20 summit is in Osaka, Japan on Friday and Saturday.These are the main moves in markets:StocksThe S&P 500 Index fell 0.95%, the biggest decline since May 31, as of 4 p.m. New York time.The Stoxx Europe 600 Index dipped 0.1%.The MSCI Emerging Market Index sank 0.8%.The MSCI Asia Pacific Index decreased 0.4%.CurrenciesThe Bloomberg Dollar Spot Index rose 0.1%.The euro dropped 0.3% to $1.1370, the first retreat in a week.The British pound declined 0.4% to $1.2696.The Japanese yen climbed 0.1% to 107.16 per dollar.BondsThe yield on 10-year Treasuries declined three basis points to 1.99%.Germany’s 10-year yield fell two basis points to -0.31%, the lowest on record.Britain’s 10-year yield dipped two basis points to 0.794%.CommoditiesWest Texas Intermediate crude was little changed at $57.89 a barrel.Gold increased 0.6% to $1,426.50 an ounce.\--With assistance from Cormac Mullen and Samuel Potter.To contact the reporters on this story: Randall Jensen in New York at email@example.com;Sarah Ponczek in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Samuel Potter at email@example.com, Yakob Peterseil, Jeremy HerronFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The global equity markets were mostly lower ahead of the opening bell as investors digested tensions between Iran and the US. There are two Fed member speeches today that stand to move the markets, depending on the message conveyed.
The early sentiment in Asia indicates that sellers have gained the upper hand. It’s not a bearish tone, per se, but rather one being dictated by long liquidation by those investors who want to avoid the pain of another steep sell-off, and aggressive short-sellers betting on the worst outcome.
Gold soared to an almost six-year high on Tuesday on escalating U.S.-Iran tensions, while equity markets slid on disappointing economic data and uncertainty on whether the Federal Reserve will cut interest rates in July as has been expected. Fed Chairman Jerome Powell said in a speech the U.S. central bank is insulated from short-term political pressures as policymakers wrestle with whether to cut rates amid slowing growth as President Donald Trump has demanded. Equity markets have rallied this month in anticipation that Fed policymakers would cut rates, but Powell's remarks cast doubt on those expectations when he referred to the Fed's independence.
(Bloomberg) -- U.S. stocks edged away from records as investors weighed expectations for easier monetary policy against concerns about a slowing global economy. Treasuries gained, while the dollar dropped.The S&P 500 fell for a second session, stalling below last week’s all-time high that was fueled by the prospect of rate cuts. Health-care paced losses as Bristol-Meyers Squibb Co. tumbled after the company said it will strip out a top drug from its merger with Celgene Corp. to get regulator approval. Energy producers dropped in the wake of new U.S. sanctions on Iran. The Russell 2000 Index slumped.Investors in risk assets have continued to shrug off signs of an economic slowdown and focus on the increasingly dovish tone at central banks around the world. That attention will intensify Tuesday when Fed Chair Jerome Powell discusses monetary policy. But sentiment could be at a crossroads as the conflict between the America and Iran has ramped up, and the meeting between China’s President Xi Jinping and Donald Trump this week at the Group of 20 conference in Japan presents a pivot point for trade relations between the two countries.The 10-year Treasury yield dropped to 2.02%, while West Texas crude rose toward $58 a barrel. The euro touched a three-month high against the dollar even as data showed that a slump in German business confidence deepened in June.It’s “a pretty good guess that we won’t see a whole lot of movement in front of the big upcoming meetings (G20 and OPEC),” wrote Matt Maley, equity strategist at Miller Tabak & Co. “Given the meeting between President Trump & President Xi at the one and the impact the situation with Iran could/should have on the other, the results of those meetings should be quite important to the stock market’s next move.”Elsewhere, gold extended its advance above $1,400 an ounce, while Bitcoin surged toward 11,000.Here are some key events coming up:Fed Chairman Jerome Powell speaks at the Council on Foreign Relations in New York Tuesday. He’ll discuss the challenges facing the U.S. economy.MSCI Inc. announces results of its 2019 Market Classification Review on Tuesday, including whether Kuwait gets upgraded from frontier to emerging-market status.The Group of 20 summit is in Osaka, Japan on Friday and Saturday.These are the main moves in markets:StocksThe S&P 500 fell 0.2% as of 4 p.m. in New York.The Nasdaq 100 Index dropped 0.3%, while the Russell 2000 Index slid 1.3%.The Stoxx Europe 600 Index decreased 0.3% to the lowest in a week.The MSCI Emerging Market Index advanced 0.1%.CurrenciesThe Bloomberg Dollar Spot Index dropped 0.1%. The euro rose 0.2% to $1.1388, the strongest in almost 14 weeks.The British pound was little changed at $1.2736.The Japanese yen was little changed at 107.31 per dollar.BondsThe yield on 10-year Treasuries dipped four basis points to 2.02%.Germany’s 10-year yield declined two basis points to -0.31%.Japan’s 10-year yield advanced less than one basis point to -0.154%.CommoditiesWest Texas Intermediate crude rose 0.6% to $57.78 a barrel.Gold climbed 1.5% to $1,421.60 an ounce, reaching the highest in almost six years.\--With assistance from Anchalee Worrachate, Yakob Peterseil and Vildana Hajric.To contact the reporters on this story: Randall Jensen in New York at firstname.lastname@example.org;Sarah Ponczek in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Randall JensenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
US equities are set for a modestly higher open while global equities are mixed to start the new week. The focus for equity traders will be on a meeting between Trump and Xi that takes place later this week.
Global equity markets traded mostly flat on Monday as investors awaited U.S.-China trade talks the end of this week at the G20 summit, and the dollar fell to three-month lows on bets the Federal Reserve may cut interest rates more than once this year. European stocks stumbled on fears of an escalation in Iran tensions, which also kept gold prices near a six-year high. U.S. President Donald Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other Iranian senior officials with new sanctions on Monday.
(Bloomberg) -- Asia’s largest retailer is hoping that a $280,000 annual salary and a managerial title in three years will lure top talent as it grapples with one of the tightest labor markets in Japanese history.The salary being considered by Uniqlo owner Fast Retailing Co. would be more than three times the average pay at the company, and nearly 10 times the national average in Japan for those with similar employment tenures.The higher pay is meant to draw in talented people to Fast Retailing and is being considered by Chief Executive Officer Tadashi Yanai, the company said. He is mulling putting the higher salaries into effect next spring. The effort follows a move earlier this year to raise compensation for some new hires.The company is considering promising young talent a move into management within three years with annual salaries of 20 million to 30 million yen ($279,329) for those sent to the U.S. or Europe, and more than 10 million yen for those in Japan, according to a Nikkei report from an interview with Yanai.As Japan struggles with an aging population and a shortfall of young workers, businesses are dismantling previously sacred cultural norms, like the correlation of pay with experience, and the notion of lifetime employment. Tech companies in Japan have made similar moves to draw in young talent, promising million dollar salaries and raising starting pay by 20 percent for top candidates.The average Fast Retailing annual pay was about 8.77 million yen as of August 2018, according to company filings. The lowest salary at the company was about 4 million yen a year, the Nikkei report said, citing previous data from the company’s recruiting website. Nationally, the average annual salary for workers with up to four years of work experience was 3.1 million yen in 2017, according to figures compiled by the National Tax Agency.Fast Retailing assigns most fresh recruits to work in Uniqlo stores, but under the new system, more will be sent to specialized departments that suit their skills in areas including information technology and design, according to the Nikkei report. The company will then choose candidates for managerial positions in Japan and overseas after three to five years.\--With assistance from Ryan Lovdahl.To contact the reporters on this story: Lisa Du in Tokyo at email@example.com;Chikafumi Hodo in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Shamim Adam at email@example.com, Dave McCombs, John McCluskeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- U.S. stocks closed lower after touching record highs as an escalation of tensions with Iran cooled this week’s rally in risk assets sparked by dovish central banks. Oil surged.The S&P 500 fell for the first time this week even after hitting a fresh intraday high, while the Dow Jones Industrial Average briefly surpassed its Oct. 3 closing record before finishing in the red. The index whipsawed Friday with volumes higher than the 30-day average as futures and options expired. The dollar was lower for a fourth day in the wake of the Federal Reserve’s dovish signals earlier in the week, while gold traded around $1,400 an ounce for the first time since 2013. U.S. crude topped $57 a barrel.“The last time we had a quad-witching day like this we had similar volatility,” said Sean O’Hara, president of Pacer ETFs Distributors. “Bigger picture issue is I think people are trying to sort of digest all of the news of the week and weigh that against the potential threats in Iran.”The risk-on mood was damped after President Donald Trump said he approved strikes overnight against Iran in retaliation for downing a U.S. drone, but then called off the operation. West Texas Intermediate posted its biggest weekly increase since December 2016."If you look at the markets today, it’s a pretty impressive performance to basically be flat," considering the news coming out of Iran, said David Donabedian, chief investment officer at CIBC Private Wealth Management. “It’s a testament to how important monetary policy is and how much the market is hanging its hat on the Fed here in the second half of the year."Policy makers in the U.S., Europe and Australia were among those signaling a readiness to do more to support growth this week, helping fuel gains for equities while putting increased pressure on sovereign bond yields. Next week, the trade issue is back up: Trump and Chinese President Xi Jinping are set to meet during the Group of 20 summit in Japan.The euro strengthened and most European bonds slipped after data showed economic activity in the region improved in June. Health care firms weighed on the Stoxx 600 Index. Asian markets were also red overall, with Japanese, South Korean and Australian shares declining as Chinese stocks rose.These are the main moves in markets:Stocks The S&P 500 Index fell 0.1% as of 4:11 p.m. New York time. The Nasdaq Composite Index dropped 0.2% and the Dow Jones Industrial Average slumped 0.1%.The Stoxx Europe 600 fell 0.4%.The MSCI Emerging Market Index was little changed.The MSCI Asia Pacific Index dropped 0.4%, the first decrease in four days. CurrenciesThe Bloomberg Dollar Spot Index fell 0.2%, the fourth straight decline.The euro gained 0.7% to $1.1372, while the yen weakened 0.1% to 107.40 per dollar. The British pound rose 0.3% to $1.2745.The MSCI Emerging Markets Currency Index rose less than 0.1%.BondsThe yield on 10-year Treasuries increased 3 basis points to 2.06%.Germany’s 10-year yield climbed 3 basis points to -0.29%.Britain’s 10-year yield rose 4 basis points to 0.85%. CommoditiesWest Texas Intermediate rose 1.7% to $57.61 a barrel. Gold increased 0.8% to $1,399.86 an ounce. The Bloomberg Commodity Index fell 0.4%.To contact the reporters on this story: Vildana Hajric in New York at firstname.lastname@example.org;Olivia Rinaldi in New York at email@example.com;Colin Beresford in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The new worry is a potential escalation of the tensions between the United States and Iran. This could limit gains today by encouraging investors to lighten up their long positions.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.U.S. stocks rose to a record, while sovereign bonds extended gains and the dollar slumped after central banks around the world continued a shift toward easier monetary policy. Oil surged amid rising tensions with Iran.The S&P 500 opened at an all-time high, spurred by speculation the Federal Reserve will cut rates soon enough to avert an economic slump. The benchmark retreated after President Donald Trump hinted at possible retaliation for Iran shooting down a U.S. drone, only to rebound and close above the previous high set on April 30. Energy shares led the gain as crude surged more than 5%. The Cboe Volatility Index rose above 15.The geopolitical tensions briefly overshadowed fresh impetus for risk assets from the Fed, Bank of Japan and Bank of England, all of which signaled a readiness to support growth. The 10-year U.S. Treasury note yield dropped below 2% for the first time since November 2016, while the greenback sank the most since January. Gold surged toward $1,400 an ounce.“In the big scheme of things, it’s a concern because it creates uncertainty,” said Ernie Cecilia, chief investment officer at Bryn Mawr Trust Co. “From a longer-term perspective, we’d think that any issues would get resolved diplomatically.” Traders are now pricing in a virtual certainty the U.S. central bank will cut rates by July, Fed fund futures show. Seven of 17 Fed officials now think it will be appropriate to lower the benchmark overnight rate by a half-percentage point by the end of the year, according to updated projections published Wednesday. Fed Chairman Jerome Powell cited “uncertainties” in the outlook that have increased the case for a rate reduction as officials seek to prolong the near-record American economic expansion.“The Fed did a great job walking what had to be a pretty fine line between giving the markets what they were wanting, the removal of ‘patience,’ the knowledge that the Fed does stand ready to cut rates, if needed,” Chris Gaffney, president of world markets at TIAA Bank, said in an interview at Bloomberg’s New York headquarters.These are the main moves in markets: Stocks The S&P 500 Index rose 1% to a closing record of 2,954.18 as of 4:06 p.m. New York time. The Nasdaq Composite Index gained 0.8% and the Dow Jones Industrial Average increased 0.94%.The Stoxx Europe 600 increased 0.4% to the highest in about seven weeks.The MSCI Emerging Market Index surged 1.6% to the highest in more than six weeks.The MSCI Asia Pacific Index climbed 1.4% to the highest in more than six weeks. CurrenciesThe Bloomberg Dollar Spot Index declined 0.6%, to the lowest since January.The euro rose 0.5% to $1.1277, the strongest in more than a week. The yen strengthened 0.5% at 107.52 per dollar, the strongest in more than five months.The British pound increased 0.5% to $1.2696, the strongest in more than a week.The MSCI Emerging Markets Currency Index rose 1%.BondsThe yield on 10-year Treasuries fell 2 basis points to 2%.Germany’s 10-year yield eased 3 basis points to -0.32%.Britain’s 10-year yield declined 6 basis points to 0.81%, after touching the lowest level in almost three years. CommoditiesWest Texas Intermediate rose 5.4% to $56.65 a barrel. Gold increased 2.1% to $1,389 an ounce. The Bloomberg Commodity Index jumped 1.8%.To contact the reporters on this story: Vildana Hajric in New York at firstname.lastname@example.org;Sarah Ponczek in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
After presenting a plethora of data and projections, Fed Chair Jerome Powell held a press conference. It was at this press conference that he opened the door to the possibility of a rate cut as soon as July. He said, “Many participants now see the case for somewhat more accommodative policy has strengthened.”
World stock markets jumped on Thursday, with the U.S. benchmark S&P 500 hitting a record high, while the 10-year U.S. Treasury note yield dipped below 2% as investors digested a signal from the Federal Reserve of potential U.S. interest rate cuts as soon as its next meeting. The dollar weakened after the Fed, the U.S. central bank, on Wednesday indicated a marked shift in sentiment even as it left its benchmark rate unchanged for now. “I do think that today’s move is due to yesterday’s Fed move," said James Ragan, director of wealth management research at D.A. Davidson.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.U.S. stocks rallied for a third day and yields on shorter-maturity Treasuries tumbled after the Federal Reserve struck a dovish tone in its latest policy statement. The dollar weakened against almost all its major peers. The benchmark S&P 500 pushed within striking distance of an all-time high set April 30, led by gains in the health care, real estate and utilities sectors. The yield on the U.S. two-year note fell by as much as 12 basis points to 1.74% after the central bank kept rates steady and signaled a readiness to cut interest rates for the first time in more than a decade.“We’re definitely hearing a decidedly more dovish Fed,” said Mike Loewengart, vice president of investment strategy at E*TRADE Financial. “While you could point the finger at pressure from the White House, it’s key to remember that the Fed’s focus has always been on two things and two things only: Jobs and inflation.”Chairman Jerome Powell and colleagues dropped a reference in their statement to being “patient” on borrowing costs and forecast a larger miss of their 2% inflation target this year. Policy makers kept their key rate in a range of 2.25% to 2.5%.Bond traders are virtually certain that the Fed will ease policy as soon as next month. The rate implied for the July 31 Fed decision dropped by 7 basis points to about 2.06%. That suggests about 31 basis points of rate cuts by then. The January 2020 fed funds futures contract implies close to 75 basis points of easing by the end of 2019.As many of the world’s biggest central banks signal a shift to easier policy, traders are weighing that against trade war fears and signs of cooling global growth. U.S. President Donald Trump said Tuesday that he had a “very good” phone conversation with Chinese President Xi Jinping. The two leaders will hold an “extended meeting” at the G-20 summit on June 28-29 in Osaka.“Members of the Fed handed the markets what they were looking for by now predicting rate cuts,” said Bryce Doty, senior vice president at Sit Investment Associates. “I can’t help feeling that many will see that a precedent has been set: Higher trade tariffs bring rate cuts.”Elsewhere, the peso strengthened versus the greenback late in the trading session after Mexico’s Senate ratified a trade deal with U.S. and Canada that will replace Nafta.These are the main moves in markets: StocksThe S&P 500 Index rose 0.3% as of 4:02 p.m. New York time, while the Nasdaq Composite Index gained 0.4% and the Dow Jones Industrial Average increased 0.2%.The Stoxx Europe 600 was little changed.The MSCI Emerging Market Index climbed 1.6%, the biggest increase in more than a week.The MSCI Asia Pacific Index surged 2%, the highest in six weeks on the largest jump in more than five months. CurrenciesThe Bloomberg Dollar Spot Index declined 0.4%, the most since May 3.The euro rose 0.3% to $1.1228, while the yen strengthened 0.3% at 108.10 per dollar.The British pound rose 0.7% to $1.2645, the biggest rise since May.The MSCI Emerging Markets Currency Index rose 0.5%.BondsThe yield on 10-year Treasuries fell 3 basis points to 2.03%.Germany’s 10-year yield climbed 3 basis points to -0.29%. CommoditiesWest Texas Intermediate rose 0.9% to $54.37 a barrel.Gold rose 0.4% to $1,352 an ounce.The Bloomberg Commodity Index dropped 0.6%.To contact the reporters on this story: Sarah Ponczek in New York at email@example.com;Vildana Hajric in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
“The news on the talks in Osaka is a short term positive for asset markets, but we believe any talks will change little unless either side makes some meaningful concessions, which we do not view as likely at this time,” Pang added. While there is only a 20% chance of a rate cut in June, traders want to hear the Fed is leaning to its first cut in 10 years in July. If this isn’t stated clearly then the markets could weaken.
Reuters reported last week that Nissan was considering having Renault executives as members of nomination, audit and compensation committees, after the French automaker expressed discontent with Nissan's envisioned governance reform. Nissan is proposing an additional board committee possibly named "strategy committee", the Nikkei said.
(Bloomberg) -- U.S. stocks approached all-time highs on optimism that President Donald Trump will de-escalate his trade war with China, adding to gains sparked by the ECB’s signal it is ready to cut interest rates if warranted. Treasuries and oil rallied.The S&P 500 trimmed a rally that topped 1.4% at its height as markets digested news that the Trump administration explored demoting Federal Reserve Chairman Jerome Powell in February. Stocks had jumped within 1% of its all-time high after Trump tweeted earlier that he will meet with Chinese President Xi Jinping at the Group of 20 summit next week. Trade tensions have weighed on stocks since Trump escalated his trade war in early May.“Up until now, the markets have been quite skeptical that a Trump, Xi meeting would happen,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle. “This pivot to an attempt to get a deal done is certainly a lot of what’s driving the market.”European Central Bank President Mario Draghi said that officials are ready with stimulus if needed, adding to expectations for easier monetary policies. Central banks in Australia, Russia, India and Chile have recently loosened policy. The Reserve Bank of Australia said Tuesday that further easing is more likely than not.The Fed is widely expected to strike a more dovish tone with its decision at the end of it’s two-day meeting Wednesday. The yield on the benchmark 10-year Treasury approached 2% before the notes pared gains. German 10-year yields tumbled further below zero. Oil surged to its biggest gain in five months as OPEC and its allies moved closer to a meeting to extend supply cuts while the Draghi’s comments raised hopes for increased demand.Elsewhere, the yen briefly weakened after a magnitude 6.8 earthquake struck off the northwest coast of Japan, triggering a tsunami advisory. Bitcoin dropped after a four-day surge.Here are some key events coming up:The Fed, Bank of Japan and Bank of England all set monetary policy, along with central banks in Norway, Brazil, Taiwan and Indonesia.The Fed’s two-day meeting ends Wednesday with a decision and press conference. Officials are expected to debate a rate cut to shelter the U.S. economy, in part, from the fallout caused by escalating trade disputes.Final May CPI data for Britain are due on Wednesday. U.K. retail sales are set for release on Thursday. These are the main moves in markets: StocksThe S&P 500 Index rose 1% as of 4:02 p.m. New York time, while the Nasdaq Composite Index gained 1.4% and the Dow Jones Industrial Average increased 1.4%.The Stoxx Europe 600 jumped 1.7%, the biggest increase since January.The MSCI Emerging Market Index rose 1.5%.The MSCI Asia Pacific Index gained 0.6%, the first increase in five trading sessions. CurrenciesThe Bloomberg Dollar Spot Index fell less than 0.1%, the first drop in three days.The euro eased 0.2% to $1.1196, while the yen strengthened 0.1% to 108.42 per dollar.The British pound rose 0.2% to $1.2560.The MSCI Emerging Markets Currency Index rose 0.5%, the first increase in five trading sessions.BondsThe yield on 10-year Treasuries dropped 4 basis points to 2.06%.Germany’s 10-year yield fell 8 basis points to negative 0.32%. CommoditiesWest Texas Intermediate surged 4.1% to $54.08 a barrel.Gold rose 0.5% to $1,346 an ounce, the first increase in three days.The Bloomberg Commodity Index rose 0.6%.To contact the reporters on this story: Sarah Ponczek in New York at firstname.lastname@example.org;Vildana Hajric in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Global equities move higher as the FOMC meeting gets underway, the committee is expected to alter the statement but traders are cautioned not to expect too much.
Stocks continued to fluctuate on Friday, as investors awaited this week’s Wednesday’s Fed Rate Decision release. The S&P; 500 index reached the new local high on Tuesday and then it came back below the 2,900 mark. So was it a downward reversal or just correction before another leg up?
(Bloomberg) -- Europe’s equity benchmark has been moving within a tight range over the past five sessions. Trade wars, geopolitical instability and poor global macro data are spurring concerns, yet there’s been no big sell-off. It seems that investors are counting on the Fed to save the day tomorrow with a rate cut.European stocks tend to react positively to a first U.S. rate cut in a cycle, as they have typically risen by 2% in the month that follows, according to Goldman Sachs strategists. It’s not a given though, as it occurred only two-thirds of the time. On the other hand, the euro rose in 77% of the cases, Goldman says.Traders seem to have already priced in at least one cut before the end of the year, even if economists are still debating the timing. The implied probability of a 25 basis point cut has moved to almost 100% today.The resilience of the market is likely built on rate-cut expectations, JPMorgan strategists write, which makes it vulnerable to a sell-off if the Fed this week doesn’t give a strong indication of a rate cut. The central bank needs to show it’s ahead of the curve, especially with the upcoming G-20 meeting (June 28-29) and the very low likelihood of positive trade talks between the U.S and China, they say.Meanwhile, the economy has been sending more warnings signals. The U.S. jobs market is showing signs of fatigue, U.S. macro surprises have come down, and remain negative in Europe. Yesterday’s Fed Empire manufacturing index had a record fall, hitting its lowest level since 2016.This month, the Morgan Stanley Business Conditions Index plummeted to its lowest level since 2008, a bad omen for the ISM manufacturing index and thus the S&P 500, Morgan Stanley says. Should the historical relationship hold, this would mean the S&P could drop 8% from current levels. And that would have a ripple effect on European stocks.The business index is also indicative of future revisions to earnings, as it’s driven by analyst surveys. The trend seems to have started already if you look at the Citigroup’s Earnings Revision Index, with expectations for companies’ results dropping in a similar fashion to the second half of last year.The Fed’s reaction to the deteriorating outlook will be closely watched on Wednesday, and the big question remains over what it can do to support the market. Failure to act could send stocks into a perfect storm.In the meantime, Euro Stoxx 50 futures are trading down 0.2% ahead of the open.SECTORS IN FOCUS TODAY:Watch oil companies after softer U.S. economic numbers hit the oil price as crude traders continue to balance out supply assurances and demand concerns. It appears OPEC is having trouble agreeing when it will meet next. Iran faces yet more criticism from U.S. politicians following its threat about breaching enriched uranium caps and President Trump decided to send more troops to the Middle East.Watch the pound and U.K. stocks as Boris Johnson remains the frontrunner but outsider Rory Stewart appears to have made waves. Separately, a Bloomberg survey shows economists expect a stagnant U.K. economy in the second quarter.COMMENT:“After the strong rebound since the start of the month, we think risks remain symmetric near term given a potential disappointment from the Fed and the ongoing uncertainty on US/China trade tensions,” Goldman Strategists write in a note. “We prefer to position via options near term as the risk of larger equity drawdowns remains elevated. Our options strategists prefer S&P 500 collars given the low level of skew.”COMPANY NEWS AND M&A:Airbus Jumps Ahead With New Jet in Paris While Boeing FloundersAmerican Air Mulls Ordering Up to 50 of Airbus’s New A321XLR JetInfineon Says Shares Placed at EU13.70, Gross Proceeds EU1.55bScania CEO Says Margin Will Increase in Coming Quarters: DIEU28 May Car Registrations Rise 0.1% Y/y to 1.401m UnitsSwedbank’s Estonian Unit Replaces CEO, CFO After Internal ProbeAgeas Got More Claims Than Expected in Fortis Settlement: FDShort Sellers Circle Blue Prism After 2,200% Rally Since IPOHutchison Chi-Med Is Said to Delay Launch of Hong Kong ListingTieto to Acquire Evry for NOK35.48/Share in Cash, Share DealItaly’s UBI Mandates KPMG to Find Single Insurance Partner: SoleCGG Wins Multi-Year Processing Contract From AdnocNordex Gets 300 MW Order From Engie UnitDassault Systemes Lead Investor in EU65m BioSerenity FinancingDeoleo Reaches Agreement to Refinance EU553M Debt: ConfidencialAmbu Cuts FY Outlook and Lowers Mid-Term Targets After ReviewVapiano Sees 2019 Net Sales Missing Estimates, Slower ExpansionNOTES FROM THE SELL SIDE:BBVA and CaixaBank are the stand-out names in a Spanish banking sector contending with lower-for-longer Euribor rates and muted domestic loan growth, RBC analysts write in a note. CaixaBank, BBVA both at outperform; Santander also outperform with Sabadell and Bankinter at sector perform and Bankia at underperform.Citi cut Evraz to sell at Citi. Broker cut the former top pick and CEEMEA focus list member as Ebitda and free cash flow are “sharply declining.” European hotel operators with headroom on their balance sheets are likely to focus on making acquisitions given slowing organic growth in the industry, Citi says in a note. Broker has buy rating on Accor due to exposure to Europe and France, the only regions showing RevPAR growth; sell on IHG given heavy U.S. exposure, and neutral on Whitbread but as single brand operator is likely to be of interest to a private equity buyer.TECHNICAL OUTLOOK for Stoxx 600 index:Resistance at 382 (50-DMA); 385.7 (61.8% Fibo)Support at 374.5 (61.8% Fibo); 368.2 (200-DMA)RSI: 51.2TECHNICAL OUTLOOK for Euro Stoxx 50 index:Resistance at 3,408 (50-DMA); 3,514 (May high)Support at 3,309 (50% Fibo); 3,266 (200-DMA)RSI: 52MAIN RESEARCH AND RATING CHANGES:UPGRADES:Accor Upgraded to Outperform at Bernstein; PT Set to 44 EurosDanone upgraded to outperform at DavyTokmanni Group upgraded to buy at Handelsbanken; PT 9.30 EurosDOWNGRADES:Avesoro Resources downgraded to hold at BerenbergBauer cut to hold at Kepler Cheuvreux; Price Target 22 EurosDerwent London cut to underweight at Barclays; PT 30 PoundsEvraz downgraded to sell at CitiEvraz Cut to Hold at VTB Capital; Price Target 6.70 PoundsHomeserve cut to equal-weight at Barclays; PT 13.20 PoundsInterContinental Hotels cut to underweight at BarclaysLufthansa downgraded to hold at HSBC; PT 16.50 EurosLufthansa Downgraded to Hold at SocGen; PT 17 EurosINITIATIONS:STMicroelectronics rated new buy at SocGen; PT 23.60 EurosVeolia rated new outperform at MainFirst; PT 24.70 EurosMARKETS:MSCI Asia Pacific down 0.4%, Nikkei 225 down 0.9% S&P 500 up 0.1%, Dow up 0.1%, Nasdaq up 0.6%Euro up 0.16% at $1.1236Dollar Index down 0.15% at 97.41Yen up 0.24% at 108.28Brent little changed at $60.9/bbl, WTI down 0.1% to $51.9/bblLME 3m Copper little changed at $5843.5/MTGold spot up 0.4% at $1345.5/ozUS 10Yr yield down 2bps at 2.07% ECONOMIC DATA (All times CET):8:45am: (IT) Bloomberg June Italy Economic Survey9am: (SP) 1Q Labour Costs YoY, prior 0.9%9:30am: (UK) Bloomberg June United Kingdom Economic Survey11am: (EC) April Trade Balance SA, est. 17b, prior 17.9b11am: (EC) April Trade Balance NSA, prior 22.5b11am: (EC) May CPI Core YoY, est. 0.8%, prior 0.8%11am: (EC) May CPI MoM, est. 0.2%, prior 0.7%11am: (EC) May CPI YoY, est. 1.2%11am: (GE) June ZEW Survey Current Situation, est. 6.1, prior 8.211am: (GE) June ZEW Survey Expectations, est. -5.6, prior -2.111am: (EC) June ZEW Survey Expectations, prior -1.6To contact the reporter on this story: Michael Msika in London at email@example.comTo contact the editors responsible for this story: Blaise Robinson at firstname.lastname@example.org, Jon MenonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Australian shares are moving higher on Tuesday after the Reserve Bank of Australia (RBA) said further easing was likely. However, investors are largely targeting defensive sectors ahead of the two-day Fed meeting.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.U.S. equities gained, led by FANG shares, while European stocks pared losses following a mixed session in Asia as a big week for central-bank policy gets underway. Crude oil slumped for the first time in three days.Facebook, Apple, Netflix and Google parent Alphabet led the Nasdaq Composite higher, while the Stoxx Europe 600 Index closed little changed. Deutsche Bank boosted lenders on reports that it’s considering creating a “non-core unit” to wind down legacy assets as part of a broader overhaul. Japanese and Australian shares declined, while equities in Hong Kong rose after the government suspended a controversial extradition bill.The dollar briefly weakened after a Federal Reserve survey of factories in New York State plunged in June by the most on record, before climbing back from the day’s lows. Treasuries pared a drop on the news, but they stayed mostly lower alongside European bonds as investors looked ahead to a week in which the Fed, the Bank of Japan and the Bank of England all set monetary policy.“We’ll find out Wednesday if the market is right about how dovish it is when it comes to monetary policy,” said Arthur Hogan, chief market strategist at National Securities Corp. “So what we’re looking for is affirmation of where the market is already, and anything that fails to affirm that probably is a negative toward the S&P 500.”Investors will be scrutinizing the Fed’s decision and messaging on Wednesday for signals on the chances of rates cuts ahead. Meanwhile, U.S. Commerce Secretary Wilbur Ross reiterated that the prospect of a major trade deal is unlikely to emerge from a possible meeting between President Donald Trump and Chinese President Xi Jinping at the Group of 20 summit in Osaka this month.“We know that the Fed doesn’t like to surprise people and the idea at this point of them digging in their heels and saying ’absolutely no cuts,’ I think is very unlikely,” Josh Kutin, head of asset allocation for Columbia Threadneedle, said in an interview at Bloomberg’s New York headquarters. “Will it be the full number that’s priced in right now? I think that’s unlikely as well. I think somewhere between is pretty fair.”Elsewhere, oil futures fell as Saudi Arabia expressed hope that OPEC and its allies will agree to extend production cuts into the second half. Bitcoin jumped as much as 11%, heading toward its highest close in more than a year.Here are some key events coming up:Federal Reserve, the Bank of Japan and the Bank of England all set monetary policy, along with central banks in Norway, Brazil, Taiwan and Indonesia.The Fed meeting begins Tuesday with a decision and press conference the next day. Officials are expected to debate a rate cut to shelter the U.S. economy, in part, from the fallout caused by escalating trade disputes.In the U.K. Tuesday there will be a second ballot on the leadership contest to choose Theresa May’s successor as leader of the country’s ruling party.Final May CPI data for the euro zone are due Tuesday.These are the main moves in markets:StocksThe S&P 500 Index rose 0.1% as of 4:03 p.m. New York time, while the Nasdaq Composite Index gained 0.6% and the Dow Jones Industrial Average increased 0.1%.The Stoxx Europe 600 eased less than 0.1%. The MSCI Emerging Market Index dropped 0.4%.The MSCI Asia Pacific Index fell 0.4%, the fourth consecutive decline. CurrenciesThe Bloomberg Dollar Spot Index rose less than 0.1%.The euro rose less than 0.1% to $1.1218, while the yen was little changed at 108.57 per dollar.The British pound fell 0.4% to $1.2542.The MSCI Emerging Markets Currency Index fell 0.1%, the fourth consecutive decline.BondsThe yield on 10-year Treasuries rose less than 1 basis point to 2.09%.Germany’s 10-year yield rose 1 basis point to negative 0.25%. CommoditiesWest Texas Intermediate fell 1.2% to $51.87 a barrel, the first drop in three trading sessions.Gold dropped 0.2% to $1,339 an ounce.The Bloomberg Commodity Index fell less than 0.1%, the first drop in third days. \--With assistance from Yakob Peterseil.To contact the reporters on this story: Vildana Hajric in New York at email@example.com;Colin Beresford in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jeremy Herron at email@example.com, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.