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US equity futures and European shares fell on Thursday after edged lower after a mixed session in Asia as concerns about rising tension between US and China offset signs of a better-than-expected start to the earnings season. The dollar was steady and Treasuries edged higher.
Contracts on the Dow, Nasdaq and S&P 500 all fell, though they came off the lows of the day. Banks and auto shares led the retreat in the Stoxx Europe 600 index after Societe Generale SA said it expected a 20% drop in quarterly trading revenue as market volatility reduced client activity.
News of US prosecutors investigating Huawei Technologies for allegedly stealing trade secrets and a disappointing outlook from Taiwan Semiconductor weighed on sentiment in tech stocks.
The pound trimmed earlier losses as Prime Minister Theresa May began talks with her political rivals to deliver a new Brexit deal. The yen strengthened and Europe’s sovereign bonds advanced.
Risk assets are showing signs of fatigue after a fairly strong start to 2019, when optimism about trade tensions and central bank support overshadowed a litany of concerns as the global economy slowed.
Now with both the US government shutdown and Brexit impasse dragging on, and lingering stress between America and China, there are plenty of reasons for caution.
Elsewhere, oil traded lower, with US crude remaining close
to $52 a barrel. Emerging-market currencies and shares edged lower. Shares in
Hong Kong tumbled, and some companies dropped more than 75% without obvious
explanations.
Here are some key events coming up:
Earnings season rolls on with Morgan Stanley and Netflix posting results. Data on US jobless claims and industrial production are due.
These are the main moves in markets:
Stocks
Futures on the S&P 500 Index fell 0.3% as of 06:10 New York time. The Stoxx Europe 600 Index declined 0.2%. The MSCI All-Country World Index decreased less than 0.05%. The MSCI Emerging Market Index dipped 0.1%.
Currencies
The Bloomberg Dollar Spot Index decreased less than 0.05%. The euro increased 0.1% to $1.1398, the biggest climb in more than a week. The Japanese yen jumped 0.3% to 108.80 per dollar.
The British pound fell 0.1% to $1.2877, the biggest fall in a week. The MSCI Emerging Markets Currency Index fell 0.1% to the lowest in more than a week.
Bonds
The yield on 10-year Treasuries declined one basis point to 2.72%. Germany’s 10-year yield was unchanged at 0.22%. Britain’s 10-year yield dipped less than one basis point to 1.306%.
The spread of Italy’s 10-year bonds over Germany’s fell two basis points to 2.5102 percentage points to the narrowest in more than two weeks.
Commodities
The Bloomberg Commodity Index gained 0.1%, reaching the highest in almost five weeks on its fifth straight advance. West Texas Intermediate crude fell 1.1% to $51.76 a barrel.
LME copper dipped 0.1% to $5 964.50 per metric ton. Gold climbed less than 0.05% to $1 294.10 an ounce, the highest in two weeks.
