Stocks fell around the world, the yen and the dollar strengthened and bonds rose on concern China’s growth will cool and U.S. earnings will disappoint.
The MSCI World Index dropped 0.5 percent at 8:05 a.m. in New York. Standard & Poor’s 500 Index futures slipped 0.5 percent. The yen appreciated against all but one of its 16 most- traded counterparts, and the Dollar Index advanced as much as 0.6 percent, its biggest gain in a month. The yield on the German 10-year bond lost five basis points to 2.22 percent. Oil and copper slipped for a second day.
Policy makers from the Federal Reserve’s Janet Yellen to the Bank of England’s David Miles suggested government efforts to boost economic growth are limited. China boosted reserve requirements for six lenders, stepping up efforts to cool the fastest-growing major economy. Posco, the world’s third-largest steelmaker, cut its full-year profit forecast after earnings declined in the third quarter.
Central bank attempts to revive growth are “the big economic focus of discussion and we have to expect it to dominate the thinking of many investors as we move through the week,” Peter Beutel, the president of energy advisory firm Cameron Hanover Inc. in New Canaan, Connecticut, wrote in a note to clients. “We feel that there will be a sense of disappointment, though, once it may actually be implemented.”
The Stoxx Europe 600 Index lost 0.2 percent as two stocks fell for every one that rose. BHP Billiton, the world’s largest mining company, slid 1.3 percent. France’s CAC 40 sank 0.7 percent for the biggest decline among 18 western European markets as workers demonstrated against the government’s overhaul of the pension system.
Asia, Emerging Markets
The MSCI Asia Pacific Index fell 1.5 percent, the biggest drop since August, as commodity companies declined. The MSCI Emerging Markets Index slipped 1 percent, with benchmark equity gauges in South Korea, Taiwan, the Philippines and the Czech Republic losing more than 1 percent. The Shanghai Composite Index rallied for a third day, as gains by commodity shares offset declines by banks.
The drop in futures indicated the S&P 500 will retreat from a five-month high, before the release of the minutes of the Federal Open Market Committee’s September meeting. Intel Corp. and CSX Corp. are among U.S. companies scheduled to report results after the close of trading in New York today. Earnings growth for companies in the S&P 500 will probably slow to 23 percent in the third quarter, compared with a 48 percent increase in the previous quarter, according to data compiled by Bloomberg.
Risk-Taking
“It is conceivable that accommodative monetary policy could provide tinder for a buildup of leverage and excessive risk-taking in the financial system,” the Fed Vice Chairman Yellen said in a speech in Denver yesterday. Bank of England policy maker Miles, speaking in Dublin today, said officials must not withdraw stimulus too soon.
The yen appreciated 0.7 percent to 113.17 per euro and 0.1 percent to 81.99 per dollar, near the 15-year high of 81.39 against the U.S. currency reached yesterday. The pound dropped 0.3 percent to $1.5846 after a report showed U.K. inflation exceeded the government’s 3 percent limit for a seventh month in September. The Australian dollar weakened 0.5 percent to 98.08 U.S. cents, and depreciated 0.6 percent to 80.38 yen.
The yield on the Dutch 10-year bond dropped four basis points to 2.43 percent. The Netherlands sold 1.82 billion euros of securities maturing in 2042 at an average yield of 2.913 percent, according to the Treasury. Greece issued 1.17 billion euros of 26-week bills at a yield of 4.54 percent, down from 4.82 percent at a Sept. 14 auction. Italy offered 6.5 billion euros of 12-month bills at an average yield of 1.441 percent, up from 1.428 percent at a sale a month ago. Belgium plans to sell three- and 12-month debt today.
The 10-year U.S. Treasury yield declined five basis points to 2.35 percent and the two-year note yield dropped to a record low 0.3270 percent before the government sells $32 billion of three-year notes, the first of three planned auctions this week.
Copper for delivery in three months declined 0.6 percent, after dropping 0.2 percent yesterday. Raw sugar futures led commodities lower, falling 1.7 percent to 26.13 cents a pound, the first drop in four days. Crude oil slipped 1 percent to $81.42 a barrel.
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Policy makers from the Federal Reserve’s Janet Yellen to the Bank of England’s David Miles suggested government efforts to boost economic growth are limited. China boosted reserve requirements for six lenders, stepping up efforts to cool the fastest-growing major economy. Posco, the world’s third-largest steelmaker, cut its full-year profit forecast after earnings declined in the third quarter.
Central bank attempts to revive growth are “the big economic focus of discussion and we have to expect it to dominate the thinking of many investors as we move through the week,” Peter Beutel, the president of energy advisory firm Cameron Hanover Inc. in New Canaan, Connecticut, wrote in a note to clients. “We feel that there will be a sense of disappointment, though, once it may actually be implemented.”
The Stoxx Europe 600 Index lost 0.2 percent as two stocks fell for every one that rose. BHP Billiton, the world’s largest mining company, slid 1.3 percent. France’s CAC 40 sank 0.7 percent for the biggest decline among 18 western European markets as workers demonstrated against the government’s overhaul of the pension system.
Asia, Emerging Markets
The MSCI Asia Pacific Index fell 1.5 percent, the biggest drop since August, as commodity companies declined. The MSCI Emerging Markets Index slipped 1 percent, with benchmark equity gauges in South Korea, Taiwan, the Philippines and the Czech Republic losing more than 1 percent. The Shanghai Composite Index rallied for a third day, as gains by commodity shares offset declines by banks.
The drop in futures indicated the S&P 500 will retreat from a five-month high, before the release of the minutes of the Federal Open Market Committee’s September meeting. Intel Corp. and CSX Corp. are among U.S. companies scheduled to report results after the close of trading in New York today. Earnings growth for companies in the S&P 500 will probably slow to 23 percent in the third quarter, compared with a 48 percent increase in the previous quarter, according to data compiled by Bloomberg.
Risk-Taking
“It is conceivable that accommodative monetary policy could provide tinder for a buildup of leverage and excessive risk-taking in the financial system,” the Fed Vice Chairman Yellen said in a speech in Denver yesterday. Bank of England policy maker Miles, speaking in Dublin today, said officials must not withdraw stimulus too soon.
The yen appreciated 0.7 percent to 113.17 per euro and 0.1 percent to 81.99 per dollar, near the 15-year high of 81.39 against the U.S. currency reached yesterday. The pound dropped 0.3 percent to $1.5846 after a report showed U.K. inflation exceeded the government’s 3 percent limit for a seventh month in September. The Australian dollar weakened 0.5 percent to 98.08 U.S. cents, and depreciated 0.6 percent to 80.38 yen.
The yield on the Dutch 10-year bond dropped four basis points to 2.43 percent. The Netherlands sold 1.82 billion euros of securities maturing in 2042 at an average yield of 2.913 percent, according to the Treasury. Greece issued 1.17 billion euros of 26-week bills at a yield of 4.54 percent, down from 4.82 percent at a Sept. 14 auction. Italy offered 6.5 billion euros of 12-month bills at an average yield of 1.441 percent, up from 1.428 percent at a sale a month ago. Belgium plans to sell three- and 12-month debt today.
The 10-year U.S. Treasury yield declined five basis points to 2.35 percent and the two-year note yield dropped to a record low 0.3270 percent before the government sells $32 billion of three-year notes, the first of three planned auctions this week.
Copper for delivery in three months declined 0.6 percent, after dropping 0.2 percent yesterday. Raw sugar futures led commodities lower, falling 1.7 percent to 26.13 cents a pound, the first drop in four days. Crude oil slipped 1 percent to $81.42 a barrel.
http://jodnet.blogspot.com
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