By Adam Haigh
- S&P 500 fell 0.2% Wednesday; 10-year Treasuries advance
- U.S. inflation report bolsters Federal Reserve rate-cut case
Paul Tudor Jones, founder of Tudor Investment Corp., says gold is the best trade over the next two years.
Stocks in Asia dropped with U.S. futures as investors assessed ongoing trade tensions alongside data that played into the hands of those gunning for looser U.S. monetary policy. The yen and Treasuries gained as risk-off sentiment picked up.
Equities fell for a second day, though declines were pared in Tokyo and Hong Kong. European futures signaled a weaker open. Treasury yields ticked lower after a weak inflation report bolstered the case for Federal Reserve interest-rate cuts. The slump in oil eased after supply concerns sent crude tumbling Wednesday. U.S. President Donald Trump said he had no deadline for China to return to trade talks, other than the one in his head.
Trump has threatened to raise tariffs on Chinese goods if President Xi Jinping doesn’t meet with him at the Group of 20 summit later this month in Japan. Commerce Secretary Wilbur Ross played down the chance of a meeting and stepped up the administration’s criticism of the Fed, urging the central bank to reconsider December’s rate hike. In the latest sign of demand for safe haven assets, an auction of 10-year bunds Wednesday drew an average yield of minus 0.24%, the lowest on record.
“Even though the Fed is still on investors’ side, some of the slowdown in international economies and the uncertainty over trade makes risk-reward at this level somewhat mixed,” Chris Konstantinos, chief investment strategist at Riverfront Investment Group, told Bloomberg TV. “We have actually taken in risk a little bit recently.”
Elsewhere, the Australian dollar declined and the three-year yield dropped below 1% for the first time after the unemployment rate rose more than expected.
Here are some key events coming up:
- The race to succeed Theresa May heats up with the first Conservative Party leadership ballot Thursday.
- Euro-area finance ministers meet in Luxembourg Thursday. On the agenda: financial penalties for Italy over its debt load, and the euro-area budget.
- China and the U.S. release industrial production, retail sales data Friday.
And these are the main moves in markets:
- Japan’s Topix index lost 0.8% at the 3 p.m. close in Tokyo.
- South Korea’s Kospi index slid 0.3%.
- Hong Kong’s Hang Seng Index fell 0.6%.
- Shanghai Composite Index added 0.2%.
- Futures on the S&P 500 Index fell 0.1%. The underlying gauge fell 0.2%.
- Euro Stoxx 50 contracts lost 0.2%.
- MSCI Asia Pacific Index fell 0.6%.
- The yen gained 0.1% to 108.36 per dollar.
- The offshore yuan held at 6.9305 per dollar.
- The Bloomberg Dollar Spot Index dipped 0.1%.
- The euro bought $1.1298, little changed.
- The Aussie dropped 0.3% to 69.11 U.S. cents.
- The yield on 10-year Treasuries fell one basis point to 2.11%.
- Australia’s 10-year yield fell two basis points to 1.41%. The three-year yield lost three basis points to 1%.
- West Texas Intermediate crude rose 0.7% to $51.50 a barrel.
- Gold rose 0.2% to $1,335.96 an ounce.
— With assistance by Todd White, and Vildana Hajric