US stocks slip with Europe after trade doubts resurface

Bloomberg

US stocks slipped along with European shares as doubts about a China trade deal weighed on sentiment, highlighting the fragile nature of recent gains as negotiations drag on.
The S&P 500 Index retreated from previous record close amid reports that Beijing is pessimistic about the chances of reaching an accord with the US.
The Stoxx Europe 600 Index dipped, led by losses in automobile companies. Treasuries edged higher along with most European government bonds. The pound jumped as the Conservative Party maintained its poll lead less than a month before UK elections.
Equity investors have been focussed on the status of trade talks for months now, and were showing modest optimismafter White House economic adviser Larry Kudlow’s comment that US-China talks were nearing the final stages.
But with US equities near all-time highs, any piece of bad news has the potential to reverse the gains of the past few weeks.
“It looks like this is by no means a done deal,” said Matthew Miskin, a market strategist at John Hancock Advisors in Boston.
“Markets have moved quite a bit on the prospects of a trade deal, but we have to see here in the next couple of days and weeks if there is any progress being made.”
Meanwhile, Japanese and Chinese equities closed higher, while stocks slipped in India and Australia. Hong Kong’s market outperformed, even as unrest in the city continued.
China’s yuan dipped and local bonds advanced after the country’s central bank lowered borrowing costs on short-term loans for the first time since 2015 and injected $26 billion into the financial system.
The moves were seen as aimed at shoring up confidence following a string of poor data in the second-biggest economy.
US economic indicators that are expected to be released include foreign holdings of Treasuries on Monday, housing starts on Tuesday and initial jobless claims on Thursday.
Britain holds its first televised leadership debate before next month’s election on Tuesday.
Federal Reserve speakers this week include district bank presidents John Williams, Loretta Mester and Neel Kashkari.
European central bankers speaking this week include European Central Bank President Christine Lagarde, Bundesbank chief Jens Weidmann, along with Yves Mersch, Luis de Guindos, Pablo Hernandez de Cos and Philip Lane. China announces its loan prime rates, a benchmark for borrowing costs, on Wednesday.
The S&P 500 Index dipped 0.2% in New York. The Stoxx Europe 600 Index fell 0.2%. Hong Kong’s Hang Seng Index jumped 1.3%.
The Bloomberg Dollar Spot Index fell less than 0.1%. The euro strengthened 0.1% to $1.1065. The Japanese yen rose 0.1% to 108.67 per dollar. The offshore yuan sank 0.3% to 7.0289 per dollar. The British pound gained 0.5% to $1.2963.
The yield on 10-year Treasuries dipped two basis points to 1.81%. Britain’s 10-year yield rose one basis point to 0.74%. Germany’s 10-year yield decreased one basis point to -0.35%.