Stocks extend global slide as trade worries simmer

Bloomberg

The global stock selloff triggered by worries over the outlook for trade extended into a third day, with US equity-index futures and European shares tracking declines across Asia. The pound slipped as hopes for a Brexit breakthrough faded.
Contracts for the S&P 500, Nasdaq 100 and Dow Jones Industrial Average had been stable for much of the European morning, but they extended losses as the session wore on. The Stoxx Europe 600 Index tracked the move, with almost every sector turning red. Equities fell earlier across Asia, with big declines seen in Japan and Hong Kong. The yen, gold
and Treasuries climbed as investors sought haven assets. The euro edged higher on upbeat German factory data.
Although broader market moves have eclipsed corporate results, earnings season continues apace. Commerzbank results were in line with estimates, while Siemens posted a beat. Toyota and Honda forecast profit and sales short of analysts’ estimates.
The unexpected escalation of President Donald Trump’s rhetoric on trade in the past few days appears to have caught global equity markets off-guard. Many had been testing record highs, seemingly priced to perfection on the assumption a deal between the US and China would get done.
The likes of JPMorgan boss Jamie Dimon still put the odds of that at 80 percent, and the S&P 500 has only fallen to levels seen a month ago — nonetheless investors will be on edge as China’s top trade negotiator visits Washington this week.
“The two largest economic powerhouses, the US and China, either will be at a trade war or a trade peace and in reality there’s only a couple of people who know the answer to that and it isn’t those of us on Wall Street,” Larry Robbins, Glenview Capital Management’s CEO, told Bloomberg TV.
Elsewhere, the yuan edged lower as data showed Chinese exports unexpectedly fell in April and imports rose. The New Zealand dollar slumped more than 1 percent as the central bank cut interest rates, though it later pared most of the drop. Oil reversed a gain.
In emerging markets, the lira extended losses against the dollar amid the fallout from Turkey’s decision to re-run municipal elections in Istanbul. The South African rand strengthened as the country headed to the polls for a national election.
The US releases trade data on Thursday. South Africa holds national elections on Wednesday. China reports on inflation on Thursday. The US releases the April CPI report on Friday.
Futures on the S&P 500 Index fell 0.6 percent in New York to the lowest in five weeks. The Stoxx Europe 600 Index declined 0.4 percent to the lowest in almost six weeks. The UK’s FTSE 100 Index dipped 0.3 percent to the lowest in almost six weeks. The MSCI Asia Pacific Index sank 1.1 percent to the lowest in almost six weeks. The MSCI Emerging Market Index decreased 0.7 percent to the lowest in almost six weeks.
The Bloomberg Dollar Spot Index gained 0.1 percent. The euro increased 0.1 percent to $1.1201, the strongest in more than a week. The British
pound decreased 0.5 percent to $1.3008, the weakest in more than a week. The Japanese yen rose 0.2 percent to 110.06 per dollar, the strongest in more than six weeks.
The yield on 10-year Treasuries declined three basis points to 2.43 percent, the lowest in almost six weeks. Germany’s 10-year yield dipped two basis points to -0.06 percent, the lowest in almost six weeks. Britain’s 10-year yield fell five basis points to 1.106 percent, the lowest in four weeks.
Gold gained 0.4 percent to $1,289.19 an ounce, the highest in almost four weeks.
West Texas Intermediate crude dipped 0.1 percent to $61.31 a barrel, the lowest in almost six weeks.