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This content was published on November 15, 2017 9:47 AMNov 15, 2017 – 09:47
(Bloomberg) — The risk-off mood that’s gripped global markets this week showed little sign of easing, as European stocks followed declines in Asia while bonds and gold advanced. The equity retreat stemmed in part from a broad-based selloff in commodities. The euro added to recent gains.
The Stoxx Europe 600 Index fell for the seventh day, after Japan’s Topix index retreated for a fifth session, both in their longest losing streaks over the past year. Mining and oil-related stocks set the tone, as the Bloomberg Commodities Index continued its worst run since June. Benchmark WTI crude fell toward $55 a barrel after industry data showed U.S. stockpiles unexpectedly rose last week and as Russia was said to waver on extending output cuts. The dollar traded near a three-week low and Treasuries led bond gains.
The cautious tone has settled in markets in recent days amid new obstacles to the U.S. overhauling taxes and as many stock gauges trade close to record highs. Attention now turns to data coming on U.S. consumer prices and retail sales for clues on the strength of the world’s largest economy after the flattest American yield curve in a decade raised concern that growth will slow.
Amid the equity pullback, Morgan Stanley advised staying overweight stocks and avoiding the temptation to sell even as valuations appear stretched. Current indicators used by the New York-based bank’s cross-asset strategy team are showing strong macro-economic data favoring a tilt to shares, with low allocation to high-yield credit.
Meanwhile, data showed Japan’s economy grew at an annualized rate of 1.4 percent in the third quarter, compared with a revised 2.6 percent in the previous quarter. The Nikkei 225 Stock Average fell for a sixth session, the longest slide since May 2016, after reaching the highest in a quarter century last week.
Terminal users can read more in our Markets Live blog.
Here are some key events investors are watching this week:
- Bank of England officials address the bank’s future on Thursday, while European Central Bank chief Mario Draghi speaks Friday.
- A string of Fed appearances may further illuminate the FOMC’s commitment to a December hike.
- U.S. CPI and retail sales data will be released Wednesday morning.
And these are the main moves in markets:
- The Stoxx Europe 600 Index dipped 0.6 percent as of 9:28 a.m. London time, hitting the lowest in two months with its seventh consecutive decline.
- The MSCI All-Country World Index declined 0.1 percent, reaching the lowest in almost three weeks on its fifth consecutive decline.
- The U.K.’s FTSE 100 Index dipped 0.5 percent, hitting the lowest in almost seven weeks with its fifth consecutive decline.
- Germany’s DAX Index dipped 0.8 percent, reaching the lowest in more than six weeks on its fifth consecutive decline.
- The MSCI Emerging Market Index fell 0.3 percent, hitting the lowest in almost three weeks with its fifth consecutive decline.
- Futures on the S&P 500 Index decreased 0.4 percent to the lowest in almost three weeks on the biggest dip in more than two weeks.
- The Bloomberg Dollar Spot Index fell 0.3 percent to the lowest in almost four weeks.
- The euro climbed 0.4 percent to $1.1845, reaching the strongest in almost four weeks on its sixth consecutive advance.
- The British pound gained 0.3 percent to $1.3198, the strongest in two weeks.
- The yield on 10-year Treasuries decreased four basis points to 2.33 percent, the lowest in more than a week on the largest tumble in almost three weeks.
- Germany’s 10-year yield decreased three basis points to 0.37 percent, the lowest in a week on the biggest tumble in almost three weeks.
- Britain’s 10-year yield declined four basis points to 1.285 percent, the largest decrease in almost two weeks.
- Gold advanced 0.3 percent to $1,284.71 an ounce, the biggest gain in a week.
- West Texas Intermediate crude fell 0.8 percent to $55.23 a barrel, the lowest in almost two weeks.
- The Topix closed 2 percent lower in Tokyo to seal its longest streak of losses since September 2016. The Nikkei 225 Stock Average was down 1.6 percent.
- Australia’s S&P/ASX 200 Index declined 0.6 percent and the Kospi index in Seoul was down 0.3 percent.
- Hong Kong’s Hang Seng Index fell 1 percent and the Shanghai Composite Index was down 0.8 percent.
- The Japanese yen jumped 0.6 percent to 112.75 per dollar, the strongest in almost four weeks on the biggest increase in almost 10 weeks.
–With assistance from Abhishek Vishnoi Andreea Papuc and Adam Haigh
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