US stocks retreat as dollar strengthens; oil rebounds

Bloomberg

US stock futures turned lower and shares dropped in Europe and most of Asia on Monday as investors struggled to drum up any optimism after a roller coaster few weeks. The dollar rose, oil halted a 10-day sell-off and the pound slid as the UK’s premier fought to save her Brexit divorce plan.
Futures on S&P 500, Dow and Nasdaq all slipped after giving up early gains, after large-cap technology shares on Friday had dragged the Nasdaq down 1.7 percent. The Stoxx Europe 600 Index’s decline was led by tech and personal goods shares. The benchmark gauge in Asia retreated, though stocks in Japan and Hong Kong finished in a tight range and those in China jumped.
The dollar rallied versus most of its major peers and crude oil advanced as OPEC and its allies started laying the groundwork to cut supply in 2019. The pound declined for a third day as pressure built on Theresa May to ditch her Brexit plan, while the euro slumped to its weakest level in more than 16 months ahead of more potential stress around Italy’s budget. Italian bonds fell as most euro-zone debt edged higher, while Treasuries didn’t trade because of a US federal holiday.
Investors have a lot on their plate right now, from deciding whether the recent earnings season was a peak to watching Brussels, where the European Commission is ready to escalate a battle with Italy over its budget deficits, and China, which produces key economic data on Wednesday.
There’s also a renewed debate on the direction of bond yields — traders have been dialing down inflation expectations before US consumer price data on Wednesday, which may offer the next clues on the trajectory of borrowing costs.
Elsewhere, emerging-market stocks and currencies fell. Bitcoin headed for its first advance in three sessions.
US bond markets are closed Monday in observance of Veterans Day San Francisco Fed President Mary Daly speaks on Monday on the economic outlook at a regional development conference in the state of Idaho on Tuesday marks the deadline set by EU for Italy to revise its budget Chinese industrial production and retail sales data due on Wednesday Fed Chairman Jerome Powell on Thursday discusses national and global economic issues with Dallas Fed President Robert Kaplan at an event hosted by the Dallas Fed US consumer inflation probably rebounded in October after easing in September. The consumer price index data is projected to show a 0.3 percent increase from the prior month. Policy decisions are coming from central banks in Mexico, Philippines, and Thailand.
The Stoxx Europe 600 Index fell 0.6 percent in New York, the largest fall in more than two weeks. Futures on the S&P 500 Index decreased 0.2 percent. Italy’s FTSE MIB Index sank 0.6 percent to the lowest in more than a week. The UK’s FTSE 100 Index dipped 0.3 percent. The MSCI All-Country World Index declined 0.3 percent.
The Bloomberg Dollar Spot Index increased 0.4 percent to the highest in 18 months. The euro fell 0.6 percent to the weakest in almost 17 months on the largest drop in almost three weeks. The British pound declined 0.8 percent to $1.2867, the weakest in more than a week.
Italy’s 10-year yield gained four basis points to 3.438 percent, the highest in almost two weeks. Germany’s 10-year yield dipped three basis points to 0.38 percent, the lowest in almost two weeks. West Texas Intermediate crude climbed 1.2 percent to $60.93 a barrel, the first advance in more than two weeks and the biggest increase in six weeks.