European stocks drift with US futures as gold advances

Bloomberg

European stocks struggled for traction with US equity futures as the Trump administration stoked tensions with Beijing by announcing new restrictions on Huawei Technologies Co. A dollar gauge slid to the lowest since 2018.
Jewellery maker Pandora A/S led losses in the Stoxx Europe 600 Index after saying sales may contract as much as 20% this year. Asian chipmakers including Taiwan’s MediaTek Inc. slumped after the
US announcement on Huawei. Treasuries advanced and gold climbed back above $2,000 an ounce. Iron ore futures rallied to highest since 2014.
The restrictions on Huawei, aimed at cutting the Chinese company’s access to commercially available chips, added to the risk-off mood amid light trading volumes.
More broadly, investors are focused on prospects for more government stimulus amid fresh outbreaks of the virus. With the S&P 500 failing to cement a fresh record on Monday, traders are looking for US lawmakers to break a deadlock over a virus-aid package.
“A lot of investment professionals as well as retail investors are on the sidelines partially because they are waiting for this second stimulus package,” Erin Gibbs, president and chief investment officer at Gibbs Wealth Management, said on Bloomberg TV. “It’s not a full-on risk on environment just yet.”
Futures on the S&P 500 Index were little changed at 9:12 am London time and the Stoxx Europe 600 Index was
little changed.
While the MSCI Asia Pacific Index rose 0.3%, the MSCI Emerging Market Index gained 0.1%.
The Bloomberg Dollar Spot Index declined 0.2% and the euro increased 0.2% to $1.1891.
While the British pound increased 0.5% to $1.3164, the onshore yuan strengthened 0.1% to 6.924 per dollar and the Japanese yen also strengthened 0.4% to 105.57 per dollar.
The yield on 10-year Treasuries sank two basis points to 0.67% and the yield on two-year Treasuries decreased less than one basis point to 0.15%.
While Germany’s 10-year yield fell one basis point to -0.47%, Britain’s 10-year yield dipped one basis point to 0.209% and Japan’s 10-year yield declined one basis point to 0.039%.
West Texas Intermediate crude was unchanged at $42.89 a barrel and Brent crude increased 0.2% to $45.47 a barrel. Gold strengthened 1.1% to $2,007.90 an ounce.