Global stocks fall on escalating US-China tensions - BNN

U.S. stocks fell a second day on concern over escalating Chinese-American tensions and worries the recovery in the world’s largest economy has stalled. Spot gold topped US$1,900 an ounce for the first time since 2011.

The S&P 500 erased its gain for the week, while the Nasdaq 100 slumped to a three-week low. American Express dropped after missing revenue estimates. Intel Corp. slumped more than 10 per cent after warning of a production delay, while rival chipmaker Advanced Micro Devices Inc. gained.

Shares in China bore the brunt of losses as Beijing ordered the U.S. to shut a consulate in a tit-for-tat retaliation. S&P 500 futures and European stocks came off their session lows. The dollar extended this week’s slide, and the offshore yuan dipped. Core European bonds fell after U.S. Treasuries turned lower. Five-year Treasury yields touched an all-time low before bouncing back.

Beijing’s latest move further strains the increasingly fraught relationship with the U.S., which forced China to leave its mission in Houston earlier this week. The two superpowers have also recently clashed on trade and early handling of the coronavirus, raising fears of a protracted conflict.

“We won’t be surprised if there is some sell-off because investors are shifting focus back to this geo-political tension,” Janet Mui, an investment director at Brewin Dolphin, said on Bloomberg TV.

Also hitting sentiment was the first uptick in U.S. jobless claims since March on Thursday. While European manufacturing data for July showed a return to growth, firms cut jobs for a fifth straight month. Earnings beats keep rolling in, though they’re coming against low expectations.

These are the main moves in markets

Stocks

• The S&P 500 Index decreased 0.7 per cent as of 9:31 a.m. New York time.
• The Nasdaq 100 Index lost 1.7 per cent.
• The Stoxx Europe 600 Index sank 1.4 per cent.
• The MSCI Asia Pacific Index dipped 0.9 per cent.
• The MSCI Emerging Market Index dipped 1.6 per cent.

Currencies

• The Bloomberg Dollar Spot Index sank 0.3 per cent.
• The euro climbed 0.1 per cent to US$1.1608.
• The British pound increased 0.1 per cent to US$1.2757.
• The onshore yuan weakened 0.2 per cent to 7.018 per dollar.
• The Japanese yen strengthened 0.5 per cent to 106.28 per dollar.

Bonds

• The yield on 10-year Treasuries gained one basis point to 0.58 per cent.
• The yield on two-year Treasuries dipped one basis point to 0.15 per cent.
• Germany’s 10-year yield climbed three basis points to -0.45 per cent.
• Britain’s 10-year yield advanced one basis point to 0.138 per cent.
• Japan’s 10-year yield was unchanged at 0.019 per cent.

Commodities

• West Texas Intermediate crude gained 0.7 per cent to US$41.37 a barrel.
• Brent crude increased 0.6 per cent to US$43.55 a barrel.
• Gold strengthened 0.4 per cent to US$1,894.07 an ounce.

--With assistance from Mark Gilbert and Adam Haigh.

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2020-07-24 13:31:43Z
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