Futures on the S&P 500 Index pared losses and the dollar turned lower as investor concern seemed to ease over the latest flare-up between America and China. European stocks fell.
Treasuries held on to their gain notched on news that the U.S. ordered China’s Houston consulate to quickly close. The State Department later said the order was to protect intellectual property and “private information” of Americans. China’s Foreign Ministry said it would “react with firm countermeasures.”
Pfizer Inc. jumped in the premarket after saying the government ordered up to 600 million doses of its vaccine candidate against COVID-19. Silver rose to its highest level in almost seven years.
Fresh Sino-U.S. tension including new charges of Chinese hacking are adding to potential risks weighing on investors who recently drove global equities to a five-month high. After the success of a European rescue package this week, Senate Republicans and the Trump administration are struggling to reach consensus on another stimulus plan. The president warned the coronavirus crisis will probably worsen before improving.
“I’m more concerned going into the August, September period: what’s going to then be the next catalyst to take the broader market higher,” Andrew Sheets, a cross-asset strategist at Morgan Stanley, said on Bloomberg TV. It’s going to be “a tougher period for stocks,” he said.
Elsewhere, oil in New York dropped from a four-month high on signs of a surprise gain in U.S. crude stockpiles.
Here are some key events coming up:
- Quarterly earnings gather steam, with reports due from Microsoft, Blackstone Group, Roche, Intel, Unilever, Canadian Pacific, Daimler, Hyundai and Mattel.
- The EIA crude oil inventory report is due Wednesday.
- U.S. weekly jobless claims come on Thursday.
These are the main moves in markets:
Stocks
- Futures on the S&P 500 Index decreased 0.1 per cent as of 8:30 a.m. New York time.
- The Stoxx Europe 600 Index decreased 0.9 per cent.
- The MSCI Asia Pacific Index declined 0.8 per cent.
- The MSCI Emerging Market Index dipped 0.5 per cent.
Currencies
- The Bloomberg Dollar Spot Index fell 0.3 per cent.
- The euro jumped 0.5 per cent to US$1.1584.
- The British pound decreased 0.1 per cent to US$1.2717.
- The onshore yuan weakened 0.2 per cent to 6.996 per dollar.
- The Japanese yen weakened 0.2 per cent to 107.04 per dollar.
Bonds
- The yield on 10-year Treasuries fell one basis point to 0.59 per cent.
- The yield on two-year Treasuries decreased less than one basis point to 0.14 per cent.
- Germany’s 10-year yield declined two basis points to -0.48 per cent.
- Britain’s 10-year yield dipped less than one basis point to 0.132 per cent.
- Japan’s 10-year yield declined one basis point to 0.019 per cent.
Commodities
- West Texas Intermediate crude declined 1.4 per cent to US$41.32 a barrel.
- Brent crude declined 1.2 per cent to US$43.77 a barrel.
- Gold strengthened 0.9 per cent to US$1,858.18 an ounce.
–With assistance from Joanna Ossinger, Adam Haigh and Ranjeetha Pakiam.
