US equities slump with Europe as pound falls

Bloomberg

US equities slumped with stocks in Europe and Asia as traders mulled the outlook for global growth and a potential escalation of tension between Washington and Beijing. The pound weakened as Theresa May was said to delay a crucial Brexit vote.
The S&P 500 Index was led lower by banks and energy companies as technology shares fared better following the gauge’s worst week since March.
Uncertainty over the strength of global growth lingered amid weak economic data out of China and news the country’s vice foreign minister summoned the US ambassador to protest the arrest of Huawei Technologies Co.’s CFO.
Auto companies led the retreat in the Stoxx Europe 600 Index, while the euro strengthened. The dollar gained while Treasuries and European sovereign bonds were mixed.
Sentiment in financial markets has been fragile in recent weeks as traders gauge whether the Federal Reserve will slow its tightening path amid lingering trade-war fears. Data has started to hint at slowing growth in the world’s top two economies, with
signs that demand remains sluggish in China coming on the heels of a moderating US labour market.
“For now, we expect that recent choppiness in the markets will continue until some material progress is made in the trade dispute with China,” John Stoltzfus, the chief investment strategist at Oppenheimer & Co., wrote in a note to clients.
Politics also remains high on the agenda, with UK Prime Minister May said to have decided to postpone a key parliamentary Brexit vote rather than risk a bruising defeat.
The EU Court of Justice upped the stakes on Monday, saying Britain could unilaterally choose to change tack and stay in the union. Meanwhile there’s another change of personnel in the White House, as Chief of Staff John Kelly prepares to step down, removing a key force for West Wing discipline from President Donald Trump’s inner circle.
Elsewhere, India’s rupee fell as exit polls showed Prime Minister Narendra Modi’s party was set for tight electoral contests in key states and as the central bank governor, Urjit Patel, resigned. Oil erased some of Friday’s rally triggered by OPEC. Emerging-market shares and currencies fell.
The European Central Bank is set to cap asset purchases at its final policy meeting of 2018 on Thursday. China industrial production, retail sales data for November is due on Friday.
The S&P 500 Index fell 0.8 percent in New York. The Stoxx Europe 600 Index declined 1 percent. The MSCI All-Country World Index dipped 1.1 percent with its fifth consecutive decline. The MSCI Emerging Market Index fell 1.9 percent.
The Bloomberg Dollar Spot Index increased 0.3 percent. The euro increased 0.2 percent to $1.1399. The Japanese yen decreased 0.3 percent to 113.03 per dollar. The British pound sank 0.8 percent to $1.2628, the weakest in almost 18 months. The MSCI Emerging Markets Currency Index sank 0.8 percent, the most in two months.
The yield on 10-year Treasuries rose one basis point to 2.85 percent. Germany’s 10-year yield climbed one basis point to 0.25 percent. Britain’s 10-year yield declined four basis points to 1.22 percent, the lowest in 16 weeks.
West Texas Intermediate crude fell 1.9 percent to $51.60 a barrel. Copper slipped 0.5 percent to $2.747 a pound. Gold dipped 0.3 percent to $1,245.38 an ounce.