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Stocks Mixed as Investors Mull Trade; Bonds Climb: Markets Wrap July 02, 2019
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European stocks edged higher and U.S. index futures slipped after a mixed session in Asia as enthusiasm over the latest U.S.-China trade truce waned. The dollar weakened while Treasuries rose.

The Stoxx Europe 600 Index barely maintained its fourth session of gains, helped by utility and food shares. In Asia, shares climbed in Hong Kong and its dollar strengthened as the market reopened after a holiday to catch up with Monday’s move -- despite violent local protests overnight. Chinese stocks were steady. European bonds advanced alongside U.S. notes, while the yield on two-year Italian debt dropped below zero for the first time since the the coalition government was formed in May 2018. Gold rebounded after tumbling Monday. Bitcoin slumped for a second day, bringing its declines this week to about 20%.

Bitcoin is back below $10,000 after some big intraday moves

Wall Street’s Monday session saw record highs for the S&P 500 Index in the wake of the weekend trade truce between the U.S. and China. While President Donald Trump declared a new round of talks was already underway, hours later his administration expanded a list of European products that may get hit with tariffs, underscoring how trade tensions are persisting on investors’ worry list. That news nicked S&P 500 futures in early Asian trading Tuesday before the contracts recouped losses.

“There’s definitely a dampening effect happening throughout sentiment in the business and corporate world” from trade tensions, said Kerry Craig, a global strategist at JPMorgan Asset Management. One or two central bank rate cuts could “steady the ship” and boost risk assets, though a prolonged cycle would suggest major weakness and prove damaging, he said.

Elsewhere, oil fluctuated as investors weighed OPEC’s extension of output cuts into 2020. The Australian dollar strengthened after the central bank cut rates as expected and suggested a further cut may not be warranted.

Here are some key events coming up:

  • Euro-zone producer prices for May are due on Tuesday, followed by PMI data on Wednesday.
  • Boris Johnson and Jeremy Hunt continue their campaign to be the next U.K. prime minister.
  • U.S. markets close Thursday for the Independence Day holiday.
  • The U.S. jobs report is due Friday and is projected to show non-farm payrolls rose by 164,000 in June, rebounding from 75,000 the month prior.

And here are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index fell 0.2% as of 9:18 a.m. London time, the largest fall in a week.
  • The Stoxx Europe 600 Index gained 0.1% to the highest in two months.
  • The U.K.’s FTSE 100 Index climbed 0.2% to the highest in 10 weeks.
  • The MSCI Emerging Market Index dipped 0.1%.
  • The MSCI Asia Pacific Index jumped 0.3% to the highest in two months.

Currencies

  • The Bloomberg Dollar Spot Index declined less than 0.05%.
  • The euro increased less than 0.05% to $1.1289.
  • The British pound fell 0.1% to $1.2628, the weakest in two weeks.
  • The Japanese yen climbed 0.2% to 108.23 per dollar.

Bonds

  • The yield on 10-year Treasuries declined one basis point to 2.01%.
  • Germany’s 10-year yield was unchanged at -0.36%, the lowest on record.
  • Britain’s 10-year yield fell two basis points to 0.791%, the lowest in almost three years.

Commodities

  • West Texas Intermediate crude dipped 0.1% to $59.01 a barrel.
  • Gold gained 0.7% to $1,393.57 an ounce, the biggest rise in more than a week.

By BLOOMBERG