US stocks slide with dollar as Treasuries advance, equities fall

Bloomberg

The cautious tone that swept into markets in recent days persisted, as equities fell around the world and bonds advanced with gold. The latest inflation data in the US did little to change views on Federal Reserve policy.
The S&P 500 Index fell for the fourth time in five days, as new obstacles emerged to the US overhauling taxes. European stocks and Japan’s Topix index are in their longest losing streaks in a year. Mining and oil-related companies set the tone, with the Bloomberg Commodities Index in its longest slide since June. West Texas crude touched $55 a barrel after industry data showed US stockpiles unexpectedly rose last week and as Russia was said to waver on extending output cuts.
The dollar remained lower even after core inflation picked up for the first time since January. Retail sales data signalled strong demand from consumers, but bonds remained higher, with the flattest American yield curve in a decade raising concern that growth will slow. Meanwhile, a selloff in high-yield credit continued, with an index of sub-investment grade European credit default swaps rising.
“So far we don’t see that much disruption in sentiment, so I think we are just taking a bit of froth off the top of the market at the moment,” Michael Metcalfe, global head of macro strategy at State Street Global Markets, said on Bloomberg TV.
Bank of England officials address the bank’s future on Thursday, while European Central Bank chief Mario Draghi speaks on Friday. A string of Fed appearances may further illuminate the FOMC’s commitment to a December hike.
The S&P 500 Index fell 0.5 percent as of 9:35 am New York time. The Stoxx Europe 600 Index dipped 0.9 percent, hitting the lowest in two months with its seventh consecutive decline. The MSCI All-Country World Index declined 0.3 percent, reaching the lowest in almost three weeks. The MSCI Emerging Market Index fell 0.4 percent.
The Bloomberg Dollar Spot Index fell 0.2 percent to the lowest in almost four weeks. The euro climbed 0.2 percent to $1.1822, reaching the strongest in almost four weeks on its sixth consecutive advance. The British pound advanced less than 0.05 percent to $1.3164. The Japanese yen climbed 0.6 percent to 112.83 per dollar, the strongest in almost four weeks on the biggest increase in almost 10 weeks.
The yield on 10-year Treasuries declined three basis points to 2.34 percent, the lowest in a week. Germany’s 10-year yield dipped three basis points to 0.36 percent, the lowest in a week on the biggest decrease in almost three weeks. Britain’s 10-year yield fell four basis points to 1.277 percent, the largest drop in almost two weeks.
Gold advanced 0.5 percent to $1,286.23 an ounce. The Topix closed 2 percent lower in Tokyo to seal its streak of losses since September 2016. The Nikkei 225 Stock Average was down 1.6 percent. Australia’s S&P/ASX 200 Index declined 0.6 percent and the Kospi index in Seoul was down 0.3 percent. Hong Kong’s Hang Seng Index fell 1 percent and the Shanghai Composite Index was down 0.8 percent.