Europe stocks, US futures little changed amid China strife

Bloomberg

European stocks and US equity futures were little changed after China said it would sanction American officials in retaliation over Hong Kong.
Stocks pulled back from earlier gains, but losses in the Stoxx Europe 600 Index were limited by rallies in Spanish bank shares. Oil advanced after Saudi Aramco said demand will continue to improve. Treasuries and the dollar was steady.
China’s Foreign Ministry announced it would sanction 11 Americans, including Senators Marco Rubio and Ted Cruz, in a tit-for-tat response to the US for sanctioning Chinese officials and their allies in
Hong Kong. The move shows discord between the two nations is heating up as Donald Trump’s administration takes a harder line against the world’s second-largest economy in the run-up to the November election.
In the backdrop, investors are grappling with an unclear timeline on the US virus relief package. Democrats and Republicans are trillions of dollars apart on overall spending and on key issues, including aid to state and local governments and the amount of supplementary unemployment benefits.
On Saturday, Trump signed four executive orders to maintain some assistance, including for unemployment benefits,
a temporary payroll tax deferral, eviction protection and student-loan relief.
“The fresh stimulus provided by President Trump through executive orders is better than none at all and provides a stop-gap solution,” said Lee Hardman, a strategist at MUFG Bank in London. “Pressure remains though on both the Democrats and Republicans to reach a more substantial and durable compromise solution.”
Elsewhere, shares in Lebanese real-estate company Solidere fall as much as 13% after trading for the first time since last week’s deadly blast in Beirut. The stock, seen as a hedge against surging inflation and the sliding Lebanese pound, is still up 85% this year.
While futures on the S&P 500 Index dipped 0.1% as of 9:45 am London time, the Stoxx Europe 600 Index has declined 0.2%.
The MSCI Asia Pacific Index was little changed and the MSCI Emerging Market Index fell 0.2%.
While the Bloomberg Dollar Spot Index jumped 0.2%, the euro sank 0.2% to $1.1758 and the British pound was little changed at $1.3055.
The Japanese yen weakened 0.1% to 106.01 per dollar and the offshore yuan was little changed at 6.9715 per dollar.
While the yield on 10-year Treasuries declined less than one basis point to 0.56%, the yield on two-year Treasuries declined less than one basis point to 0.13% and Germany’s 10-year yield sank one basis point to -0.52%.
Britain’s 10-year yield declined one basis point to 0.133% and Japan’s 10-year yield also dipped one basis point to 0.012%.
While West Texas Intermediate crude gained 0.6% to $41.83 a barrel, Brent crude increased 0.4% to $44.85 a barrel and gold weakened 0.1% to $2,034.33 an ounce.