US stocks pare losses as oil rally gives a lift; dollar steady

Bloomberg

US stocks shook off the worst of their losses as oil rose before a key OPEC meeting this week. Equities declined in Europe and Asia amid concern over the escalating protectionist standoff between China and the US.
The S&P 500 came off its lows of the day as energy shares advanced along with software makers. The Stoxx Europe 600 Index headed for its biggest two-day decline since March, while Japan’s Topix Index fell the most in almost three weeks. Crude climbed as producers were said to discuss a smaller-than-expected boost to production. Treasury yields fluctuated after trading near the lowest level this month.
Global trade is firmly back at the top of the agenda, with investors fretting about the intensifying confrontation between the US and China. The Asian nation swiftly responded after President Donald Trump slapped tariffs on $50 billion of imports, putting an additional 25 percent levy on $34 billion of American agricultural and auto exports starting from July 6.
“Tariffs are coming and you need to pay very, very careful attention to the impact it’s going to have on your holdings,” Bank of Singapore Chief Investment Officer Johan Jooste told Bloomberg Television.
“There are too many unknowns right now to be terribly specific. The thing you do know is risk is higher. The market will take something of a cautionary stance.”
In Europe, German Chancellor Angela Merkel and British PM Theresa May both face crunch weeks over migration and Brexit, respectively. Trump said that German people “are turning against their leadership as migration is rocking the already tenuous Berlin coalition.” The dollar was mostly steady as the pound weakened.
An index of emerging-market currencies was set for a fifth day of losses, leaving it on track for the biggest quarterly decline since September 2015. Equities extended a drop after their worst weekly performance in a month, with the MSCI index of developing-nation stocks retreating for a fourth day.
European Central Bank President Mario Draghi speaks at ECB’s Forum on Central Banking on Tuesday. US housing starts probably rose in May, data out on Tuesday is expected to show. Draghi, Reserve Bank of Australia Governor Philip Lowe, Bank of Japan Governor Haruhiko Kuroda, and Fed Chairman Jerome Powell join a panel on central bank policy in Sintra, Portugal, on Wednesday.
The S&P 500 fell 0.3 percent in New York. The Stoxx Europe 600 Index decreased 0.8 percent. Japan’s Nikkei 225 Stock Average fell 0.8 percent to the lowest in more than a week. The MSCI Emerging Market Index declined 0.8 percent to the lowest since December.
The Bloomberg Dollar Spot Index was little changed near the highest in 11 months. The euro was little changed at $1.1613. The British pound fell 0.3 percent to $1.324. The Japanese yen rose 0.2 percent to 110.46 per dollar, the largest advance in more than a week.
The yield on 10-year Treasuries was little changed at 2.92 percent. WTI oil rose 0.2 percent to $65.19 a barrel.