US stocks drift as economic momentum, trade mulled

Bloomberg

US index futures drifted with stocks in Europe as investors digested developments in trade talks and comments from a Federal Reserve official about the strength of the biggest economy. Treasuries climbed and a gauge of the dollar held close to the year’s high.
Contracts on three main American equity indexes all struggled for traction after the underlying benchmarks rose, when the US commerce secretary said the nation will delay restrictions on some operations of China’s Huawei Technologies. The Stoxx Europe 600 Index fluctuated. Shares advanced across Asia except for markets in Hong Kong and Shanghai. Retailers Home Depot and Kohl’s both missed estimates for their quarterly sales.
Treasuries recovered from declines when Fed Bank of Boston President Eric Rosengren pushed back against further rate cuts. Government bonds climbed in Europe except for Italy’s, where leaders may force an early election.
The pound extended losses after the European Union poured cold water on the prime minister’s attempt to renegotiate the Brexit deal. A Bloomberg dollar index steadied, close to its 2019 record.
The headlines on global trade and interest rates may provide some reprieve for investors spooked by tumbling bond yields. The US decision on Huawei was seen as encouraging for the long-awaited trade pact between the world’s two largest economies. Still, the Chinese company said the temporary relief doesn’t change the fact that it’s been treated “unjustly.”
Meanwhile, Trump’s top economic adviser, Larry Kudlow, will speak with business leaders this week amid concerns about the rising odds for a recession, the trade war and whipsawing markets. That comes before Fed Chairman Jerome Powell’s remarks about the challenges for monetary policy at the Jackson Hole symposium on Friday.
“Our thesis maintains that over the next six months equity markets should do better, really mainly underpinned by the lower interest rates around
the world,” Jun Bei Liu, a portfolio manager at Tribeca Investment Partners in Sydney, told Bloomberg TV.
Elsewhere, there was muted reaction after China made borrowing costs cheaper for companies with the introduction of a revamped market benchmark rate. Oil futures were steady.
Minutes of the Fed’s July meeting will provide details on the discussions leading to the first interest-rate cut in a decade when they are released on Wednesday.
Thursday brings the Bank Indonesia rate decision and press conference with Governor Perry Warjiyo. Flash PMIs are due for the euro area on Thursday.
Kansas City Federal Reserve Bank hosts annual central banking symposium in Jackson Hole, Wyoming, starting from Thursday. Fed Chairman Jerome Powell will give remarks on Friday.
Futures on the S&P 500 Index fell 0.1 percent in New York. The Stoxx Europe 600 Index declined less than 0.05 percent. The MSCI Asia Pacific Index increased 0.6 percent. Hong Kong’s Hang Seng Index decreased 0.2 percent.
The Bloomberg Dollar Spot Index declined less than 0.05 percent. The British pound fell 0.4 percent. The euro advanced less than 0.05 percent to $1.1083. The Japanese yen climbed 0.3 percent to 106.34 per dollar.
The yield on 10-year Treasuries dipped four basis points to 1.57 percent. Britain’s 10-year yield fell three basis points to 0.438 percent.
Gold advanced 0.7 percent to $1,507.31 an ounce. West Texas Intermediate crude declined 0.5 percent to $55.97 a barrel.