^N225 - Nikkei 225
| Previous close | 23,292.65 |
| Open | 23,176.49 |
| Volume | 0 |
| Day's range | 23,176.49 - 23,303.17 |
| 52-week range | 18,948.58 - 23,591.09 |
| Avg. volume | 66,395 |
- Bloomberg
Stocks Drop With U.S. Yields on U.S.-China Tension: Markets Wrap
(Bloomberg) -- Asian stocks and American equity futures retreated after the U.S. Senate passed legislation supporting Hong Kong protesters, triggering a renewed warning of retaliation from China and potentially complicating U.S.-China trade talks. Treasuries climbed and the offshore yuan hit session lows after China’s unspecified warning. Hong Kong shares fell along with Japanese and South Korean benchmarks. Australian equities saw the biggest declines, after allegations of financial crimes at Westpac Banking Corp. hit financial stocks. The S&P 500 Index ended Tuesday flat amid disappointing reports at some American retailers, though the Nasdaq Composite eked out a fresh high. Oil steadied after sliding more than 3%.With no signing date set yet for a trade deal, the Hong Kong situation could complicate reaching any agreement. The bill requiring reviews of the city’s autonomy now goes to the House for another vote before it goes to President Donald Trump.Meantime, disappointing reports from U.S. retailers Tuesday reminded investors that growth rates have yet to rebound. Japanese data Wednesday showing a tumble in exports also underlined the global hit from the trade war.“It’s a time for the thoughtful investor to be more cautious,” George Ball, chairman of Houston investment firm Sanders Morris Harris Group Inc., said on Bloomberg TV. “Even the best economy that you can think of is going to pull back, it has to happen. And I think it’s going to happen, in the U.S. markets at least, fairly soon.”Elsewhere, the pound retreated after U.K. opposition leader Jeremy Corbyn beat expectations in the first leadership debate ahead of next month’s election. The currency had gained earlier this week on signs that Prime Minister Boris Johnson was heading for a Conservative majority.Here are some key events coming up this week:U.S. economic indicators due for release include initial jobless claims on Thursday.Federal Reserve speakers this week include district bank presidents 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 rate on Wednesday.These are the main moves in markets:StocksJapan’s Topix index fell 0.6% as of 10:32 a.m. in Tokyo.Hong Kong’s Hang Seng declined 0.9%.The Shanghai Composite lost 0.2%Futures on the S&P 500 Index fell 0.3%. The underlying index slid 0.1% on Tuesday.Australia’s S&P/ASX 200 Index lost 1.2%.South Korea’s Kospi index dropped 0.7%CurrenciesThe yen edged up to 108.39 per dollar.The offshore yuan dipped 0.1% to 7.0375 per dollar.The Bloomberg Dollar Spot Index was flat.The pound was at $1.2905, down 0.2%.The euro bought $1.1074, little changed.BondsThe yield on 10-year Treasuries fell three basis points to 1.75%.Australia’s 10-year yield slid more than four basis points to 1.08%.CommoditiesWest Texas Intermediate crude added 0.3% to $55.37 a barrel after sliding more than 3% on Tuesday.Gold rose 0.1% to $1,474.15 an ounce.\--With assistance from Christopher Anstey, Sophie Caronello and Jessica Summers.To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.netTo contact the editor responsible for this story: Christopher Anstey at canstey@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Tech Lifts Nasdaq to Record as Retail Drags on Dow: Markets Wrap
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.The Nasdaq Composite climbed to a fresh record on the back of gains in megacap tech companies even as the Dow Jones Industrial Average sank following disappointing reports from retailers.Gains in Facebook, Broadcom and Tesla lifted the Nasdaq while Home Depot was the biggest drag on the Dow after the company cut its annual forecast for the second time this year. Investors also mulled the implications of a report that U.S. and Chinese negotiators may link the size of tariff rollbacks to terms set during talks in May. Ten-year Treasury yields dipped below 1.8%, while oil tumbled for a second day.The dollar edged higher against its major peers after President Donald Trump said he “protested” U.S. interest rates that he considers too high in a meeting with Federal Reserve Chairman Jerome Powell at the White House. The Fed said Powell’s remarks were “consistent” with his recent public comments.Investors remain sensitive to any signs of whether U.S. consumers can continue supporting economic growth and are looking for developments on trade after months of closely watched negotiations. One challenge for stocks across developed markets lies in the MSCI World Index’s 21% advance this year, which has propelled the benchmark to its highest estimated price-earnings ratio since 2017.”More and more people are concluding that the economy has some strength, that it’s strong enough to support rising stock prices,” said Kate Warne, an investment strategist at Edward D Jones & Co. in St. Louis. “While consumer spending is falling, it’s not falling off a cliff. Overall most of the news has been good, investors are feeling more confident.”Elsewhere, European stocks ended lower. Equities fell in Tokyo and climbed in Shanghai. Gold held steady.Here are some key events coming up this week:U.S. economic indicators due for release include initial jobless claims on Thursday.Britain holds its first televised leadership debate before next month’s election 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.These are the main moves in markets:StocksThe S&P 500 Index slipped less than 0.1% at the close of trade in New York; the Nasdaq Composite gained 0.2%; the Dow fell 0.4%.The Stoxx Europe 600 Index fell 0.1%The MSCI Emerging Market Index gained 0.4%.CurrenciesThe Bloomberg Dollar Spot Index rose less than 0.1%.The pound fell 0.2% to $1.2926.The euro increased less than 0.1% to $1.1077.The Japanese yen gained 0.1% to 108.55 per dollar.BondsThe yield on 10-year Treasuries dipped three basis points to 1.78%.Germany’s 10-year yield was little changed at -0.34%.Australia’s 10-year yield declined four basis points to 1.13%.CommoditiesWest Texas Intermediate crude declined 3.2% to $55.25 a barrel.Gold was little changed at $1,472.17 an ounce.\--With assistance from Andreea Papuc, Michael Msika, Todd White and Yakob Peterseil.To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Claire Ballentine in New York at cballentine@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Brendan WalshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Asian Traders Shrug-Off Trade Deal Concerns; Alibaba Listing Boosts Hang Seng; Aussie Shares Up on Rate Cut Hopes
Hong Kong’s Hang Seng Index rose sharply for a second session this week on the hopes of fresh government stimulus and the news that Alibaba will close its order books to institutional investors early for its upcoming secondary listing in Hong Kong. The Australian share market rallied after it was revealed the Reserve Bank gave serious consideration earlier this month to cutting rates for a fourth time this year.
- Bloomberg
Stocks Edge Higher With Focus on China Trade Deal: Markets Wrap
(Bloomberg) -- U.S. stocks edged higher to fresh records as investors looked for signs of progress in U.S.-China trade negotiations. The dollar weakened and Treasury yields dipped.The S&P 500, Dow Jones Industrial Average and Nasdaq Composite all fluctuated throughout the day, but ended up eking out a gain. Defensive shares such as consumer staples and utilities performed best. Word that the White House would extend a license to allow U.S. companies to do business with Chinese telecom firm Huawei competed with reports that said Beijing was skeptical about reaching a broad deal anytime soon.U.S. equities are showing their sensitivity to any developments on trade after months of closely followed negotiations. Today’s records extended gains from last week, when White House economic adviser Larry Kudlow said U.S.-China talks were nearing the final stages.“I don’t know how many times we’ve seen optimism turn into pessimism,” said Jerry Braakman, chief investment officer of First American Trust in Santa Ana, California, which manages around $1.7 billion. “If it was easy, it would already be signed.”Meanwhile, the dollar extended a slide after Federal Reserve Chairman Jerome Powell met with President Donald Trump and Treasury Secretary Steven Mnuchin on Monday to discuss the economy. 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.Most members of the Stoxx Europe 600 Index fell. The pound jumped as the Conservative Party maintained its poll lead less than a month before U.K. elections.China’s yuan dipped 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.On the energy front, Saudi Arabia set an IPO valuation target for Aramco well below the kingdom’s goal of $2 trillion and pared back the size of the sale. It looks set to rely on local investors after most international money managers balked at even the reduced price target.Here are some key events coming up this week:U.S. economic indicators due for release include housing starts Tuesday and initial jobless claims on Thursday.Britain holds its first televised leadership debate before next month’s election 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.These are the main moves in markets:StocksThe S&P 500 Index rose less than 0.1% at the close of trading in New York.The Stoxx Europe 600 Index was little changed.Hong Kong’s Hang Seng Index jumped 1.3%.CurrenciesThe Bloomberg Dollar Spot Index fell 0.1%.The euro strengthened 0.2% to $1.1075.The Japanese yen rose 0.1% to 108.65 per dollar.The offshore yuan sank 0.3% to 7.0254 per dollar.The British pound gained 0.5% to $1.2955.BondsThe yield on 10-year Treasuries dipped two basis points to 1.81%.Britain’s 10-year yield rose two basis points to 0.75%.Germany’s 10-year yield was little changed at -0.34%.Italy’s 10-year yield fell two basis points to 1.21%.CommoditiesWest Texas Intermediate crude decreased 1.5% to $56.84 a barrel.Gold rose 0.2% to $1,471.77 an ounce.\--With assistance from Michael Msika, Andreea Papuc and Todd White.To contact the reporters on this story: Claire Ballentine in New York at cballentine@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.netTo contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, ;Jeremy Herron at jherron8@bloomberg.net, Brendan WalshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Asian Shares Mostly Higher; Hang Seng Jumps on Stimulus Expectations
The markets were propped up by optimism over a possible U.S.-China trade deal, however, most investors were still awaiting concrete signs of progress in the trade talks. Sentiment in Asia got a lift after China’s central bank unexpectedly trimmed a closely watched lending rate on Monday, the first such cut in more than four years and a signal to markets that policymakers are ready to act to prop up slowing growth.
- FX Empire
Asia Pacific Shares Mixed: Violence Pressures Hang Seng, Weak Data Drives Shanghai, Nikkei Lower, Aussie Stocks Rise on Rate Cut Hopes
Protests in Hong Kong drove the Hang Seng Index down 4.79% last week with a violent turn Monday. China’s industrial output grew significantly slower than expected in October. The Nikkei was pressured by a report that showed growth in Japan’s economy ground to a near standstill in the third quarter. Shares in Australia were unpinned last week after disappointing October jobs data raised the chances of another rate cut by the Reserve Bank of Australia (RBA) in the coming months.
- Bloomberg
U.S. Stocks Reach Records, Bonds Fall on Trade: Markets Wrap
(Bloomberg) -- Stocks rose to all-time highs and Treasuries edged lower after an American official hinted that the U.S. and China are close to locking down a partial trade deal. The dollar declined.The S&P 500 reached another record and gained for the sixth week in a row, the longest streak in two years, after White House economic adviser Larry Kudlow said late Thursday negotiations between the two countries were nearing the final stages. Both the Dow Jones Industrial Average, which past 28,000 for the first time, and the Nasdaq Composite also hit all-time highs.Health care companies as well as trade-sensitive tech shares led the advance. Applied Materials Inc. surged after the maker of chip equipment boosted its sales forecast.The benchmark 10-year Treasury yield rose for the first time this week, while the dollar dropped for a second day following a mixed bag of retail sales figures and weak factory numbers. The yen fell along with gold.“The markets have priced in the fact that it may not get done even though you’ve seen it move higher. But if you look at whenever they say ‘trade war is on, trade tariffs are off,’ -- if you look at that maneuver, it’s volatile to a point but it’s not significant,” Matt Lloyd, chief investment strategist at Advisors Asset Management, said by phone. “Most of us have gotten used to it. We’ve re-calibrated. It’s like the boy who cried wolf.”Concerns about the chances of the U.S. and China completing a phase-one pact had propelled Treasuries earlier this week, and acted as a headwind to a stock rally that keeps taking American gauges to record highs. The S&P 500 closed slightly higher on Thursday, though a mixed bag of global economic data has also given investors plenty to think about.Elsewhere, European, emerging-market and Asian stocks gained. China’s yuan strengthened against the dollar.These are the main moves in markets:StocksThe S&P 500 Index rose 0.8% as of 4 p.m. New York time.The Stoxx Europe 600 Index climbed 0.4%.The MSCI Asia Pacific Index gained 0.6%.The MSCI Emerging Market Index rose 0.7%.CurrenciesThe Bloomberg Dollar Spot Index dipped 0.2%.The euro gained 0.3% to $1.1054.The British pound rose 0.2% to $1.2904.The onshore yuan increased 0.3% to 7.0043 per dollar.The Japanese yen dipped 0.2% to 108.68 per dollar.BondsThe yield on 10-year Treasuries gained one basis point to 1.83%.Germany’s 10-year yield increased one basis point to -0.34%.Britain’s 10-year yield advanced two basis points to 0.725%.Japan’s 10-year yield decreased less than one basis point to -0.068%.CommoditiesWest Texas Intermediate crude rose 1.6% at $57.70 a barrel.Gold fell 0.3% to $1,468.40 an ounce.\--With assistance from Namitha Jagadeesh, Samuel Potter and Claire Ballentine.To contact the reporters on this story: Randall Jensen in New York at rjensen18@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Yakob PeterseilFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Global Markets Edge Higher, Trades Hopes Are Stoked, Weak Data Points To Further Slowing
Global markets edge higher on trade hopes but still no deal in sight, traders are warned to expect too much from the deal when and if it comes.
- FX Empire
Asian Shares Firm after Kudlow Says Phase One Trade Talks in Final Stages
Later on Thursday, White House economic adviser provided another ray of hope when he said negotiations over the first phase of a trade agreement with China were coming down to the final stages, with the two sides in close contact.
- Bloomberg
U.S. Stocks Edge Higher; Bonds, Dollar Advance: Markets Wrap
(Bloomberg) -- U.S. stocks edged higher, stalling below all-time highs as investors remained skittish about whether the U.S. and China will be able to hash out a partial trade deal. The dollar and Treasuries rose.The S&P 500 eked out its second straight gain, treading just under its record reached as part of a more than 7% rally since the start of October, fueled by trade hopes, waning recession fears and rate cuts. Tech shares gyrated after a report said farm purchases have become another of several issues in negotiations between the world’s two largest economies. The Dow Jones Industrial Average reached a record as Walt Disney Co. surged following the debut of its streaming service.The 10-year Treasury yield fell the most in more than a week, while the dollar rose for the seventh time in eight sessions to the highest in a month. The yen advanced along with gold. West Texas crude rose to $57 a barrel.“There was a mild optimism in the market today fueled by hopefulness about the consumer. On the other hand, the whole trade tariff thing doesn’t seem to be any closer to a resolution,” said John Carey, portfolio manager at Pioneer Investment Management Inc. “That uncertainty is still out there, but at this point people have gotten used to that uncertainty. A continued non-resolution isn’t a new negative, it’s just part of the landscape we’ve been watching.”The prospect of a deal between the world’s two biggest economies has become key to sustaining a rally that drove American stocks to records, as it appears the Fed will be on the sidelines for a long time. The U.S. and China have yet to announce a new location or time to seal the agreement after an international gathering in Chile was canceled, and it’s unclear whether Trump’s renewed threats will move things forward.Elsewhere, emerging-market shares fell as Hong Kong’s benchmark stocks gauge slumped as the city endured a third day of unrest. Japanese shares retreated along with those in South Korea and Australia. New Zealand’s dollar jumped after the country’s central bank unexpectedly kept interest rates unchanged.Here are some key events coming up this week:Earnings season is slowing. Reports are due this week from companies including Japan Post Bank, Walmart, and Cisco.U.S. CPI and earnings data Wednesday may provide more clues on the Fed’s policy pathThursday brings China retail sales and industrial production data.U.S. retail sales on Friday are forecast to rebound in October after unexpectedly falling the prior month.These are the main moves in markets:StocksThe S&P 500 Index rose 0.1% at 4 p.m. New York time.The Stoxx Europe 600 Index declined 0.3%.The U.K.‘s FTSE 100 Index declined 0.2%.The MSCI Emerging Market Index sank 1.2%.CurrenciesThe Bloomberg Dollar Spot Index gained 0.1%.The euro was little changed at $1.1005.The British pound was little changed at $1.2838.The Japanese yen rose 0.2% to 108.84 per dollar.BondsThe yield on 10-year Treasuries sank five basis points to 1.88%.Britain’s 10-year yield dipped five basis points to 0.75%.Germany’s 10-year yield declined five basis points to -0.299%.Japan’s 10-year yield fell two basis points to -0.042%.CommoditiesWest Texas Intermediate crude rose 0.7% to $57.23 a barrel.Gold climbed 0.5% to $1,463.99 an ounce.\--With assistance from Robert Brand and Vildana Hajric.To contact the reporters on this story: Randall Jensen in New York at rjensen18@bloomberg.net;Claire Ballentine in New York at cballentine@bloomberg.netTo contact the editor responsible for this story: Jeremy Herron at jherron8@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Asian Shares Lower; Hong Kong Violence Escalates; Alibaba Breaks Singles Day Record
Chinese e-commerce giant Alibaba set a new sales record on Singles Day, the world’s largest 24-hour shopping event. The S&P;/ASX 200 Index posted its highest closing price since August 1, the same week it reached an all-time high closing value of 6845.
- Bloomberg
Fukushima to Become Solar, Wind Hub Using Farmland Tainted by Radiation
(Bloomberg) -- Japan is pursuing a 300 billion ($2.75 billion) yen project to transform disaster-struck Fukushima prefecture into a clean-energy hub, with the development’s first solar farm scheduled to start in January.Building wind and solar farms on agricultural land tainted by radiation from the 2011 Dai-Ichi plant meltdown will help rejuvenate the area, which also suffered earthquake and tsunami damage, Masashi Takeuchi, the head of the energy division at the Fukushima prefectural government, said Monday.The venture includes plans for 11 solar farms and 10 wind farms with total capacity of 600 megawatts and is scheduled for completion by March 2024. The government plans to contribute 30 billion yen of subsidies and the Nikkei reported earlier the Development Bank of Japan and Mizuho Bank are among the institutions planning to provide financing.The first solar farm will probably be a 20 megawatt project in Minamisoma city in the northern part of Fukushima prefecture, according to Takeuchi. Fukushima, which provided nuclear power to Tokyo prior to the disaster, is transforming its energy policy as Tepco scraps reactors amid public concern about their safety.\--With assistance from Isabel Reynolds.To contact the reporter on this story: Aya Takada in Tokyo at atakada2@bloomberg.netTo contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Aaron ClarkFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times
Cambodian oil: the dream that refuses to die
Cambodia’s most promising oil concession — is the dream that refuses to die. Like many of its neighbours in south-east Asia, Cambodia has received billions of dollars in investments and loans linked to Beijing’s Belt and Road infrastructure push. Oil exports could go some way towards putting the country on a stronger financial footing, including chipping away at a 12 per cent current account deficit.
- Financial Times
Will retail sales figures show the US economy in decent health?
Investors will be watching monthly US retail sales closely this week. September saw the first stumble in seven months, fanning worries that slowing economic growth had finally caught up with the American consumer. Economists surveyed by Bloomberg expect the data for October, to be released on Friday, to show an increase of 0.2 per cent.
- Bloomberg
Stocks Finish Higher in Week of Trade Turbulence: Markets Wrap
(Bloomberg) -- U.S. equities finished a week of dueling tariff headlines on a high note, as investors tried to anticipate the next moves in the trade war with China. Ten-year Treasury yields gained, while the dollar rose and West Texas crude held above $57 a barrel.The S&P 500 Index ticked up to a new closing high Friday, surpassing a record set the previous session and registering its fifth consecutive weekly gain, sparked by optimism that global growth troubles are dissipating. Tech shares and health-care stocks led advancers, while energy and utilities slid. The Dow Jones Industrial Average ended the session little changed, while the Nasdaq Composite also reached a record.Investors have been whipsawed the past two days amid an onslaught of contradictory headlines about progress toward an interim deal in the U.S.-China trade war. Officials from the two countries both said Thursday that a phase-one agreement would feature pledges to roll back tariffs on each others’ goods in phases, but President Donald Trump said Friday that the U.S. hasn’t agreed to a rollback, dimming hopes for a preliminary trade deal anytime soon.“Investors figure that, by and large, something will get done. Investors think that some trade deal is going to come over the coming months, very possibly by year’s end,” said Rick Bensignor, the founder of Bensignor Group and a former strategist for Morgan Stanley. “It’s a positive step towards doing something that shows two countries can come together and get some stuff done.” Insurance and financial companies weighed on the Stoxx Europe 600 Index, but the gauge still scored a weekly gain as well. China’s exports declined less than expected in October as optimism rose about an interim trade deal, though imports contracted for a sixth straight month. The offshore yuan edged lower though stayed stronger than 7 per dollar.Elsewhere, an early rally for Asian stocks fizzled, leaving most shares down in the region. Hong Kong equities were among the worst performing after the death of student protester threatened to inflame demonstrations planned for this weekend. Japanese 10-year government bond yields climbed alongside their Australian peers.Here are the main moves in markets:\--With assistance from Joanna Ossinger, Adam Haigh and Constantine Courcoulas.To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Andrew DunnFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Asian Shares Weaken as Tariff Rollback Optimism Softens
China’s exports and imports declined in October, Reuters reported citing data from the country’s customs released on Friday. In dollar terms, exports fell 0.9% while imports fell 6.4% from a year ago in October, but beat analysts’ forecasts.
- Bloomberg
Stocks Hit Record Even as Trade Concerns Linger: Markets Wrap
(Bloomberg) -- U.S. stocks sputtered late in the session Thursday but still managed to close at a record high as traders were whipsawed by conflicting headlines on the progress of trade talks with China. Early reports that the U.S. and China were prepared to exchange tariff rollbacks pushed the the S&P 500 Index higher throughout the day, but the rally lost some steam after Reuters said the plan was meeting resistance in the White House. White House economic adviser Larry Kudlow later told Bloomberg, “If there’s a phase one trade deal, there are going to be tariff agreements and concessions.” Before the Reuters report, haven assets from gold to sovereign bonds had been sinking -- along with defensive stocks like utilities and real estate -- as a risk-on mood gripped markets. Copper and crude jumped at least 2% before paring gains.Sovereign bonds plunged around the world on the earlier positive trade news, with the 30-year Treasury yield hitting its highest since August. Ten-year French and Belgian bond yields climbed back above 0% for the first time in months, while the German equivalent surged 10 basis points. Yields remain elevated, even after the latest trade wrinkle. Gold fell nearly $30 an ounce at one point, only recover some of that loss, but still hit a three-month low.Risk appetite had been picking up as news of progress on trade helped counter earlier reports that a preliminary accord may not happen this month as the two sides continued to wrangle over a location to sign it. But the latest headlines have left traders to wait for the next bit of news.“Until it gets signed, I think markets are going to stay cautious, which means you’re not going to price in the best-case scenario,” Chris Gaffney, president of world markets at TIAA, said by phone.West Texas crude futures traded near $57 a barrel in New York. The pound weakened after two Bank of England policy makers unexpectedly voted for an interest-rate cut.Here are some key events coming up this week:Earnings are due Thursday after the close from Walt Disney Co.The USDA World Agricultural Supply and Demand Estimates Report for November comes out Friday.These are the main moves in markets:\--With assistance from Adam Haigh, Andreea Papuc, Elena Popina, Cecile Vannucci and Todd White.To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Claire Ballentine in New York at cballentine@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Andrew DunnFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Why More Demand for Japanese Stocks Is Bad News for the Yen
(Bloomberg) -- The yen has been the worst-performing major currency in the past month as optimism over U.S.-China trade talks and Brexit sapped demand for havens. Another reason it is declining is more curious: increased trading of Japanese stocks by overseas investors.The dynamics work like this: foreign funds have boosted trading of Japanese shares but they are unwilling to take on currency risk at the same time. For that reason they choose to hedge purchases for foreign-exchange movements, which typically involve selling yen via forward contracts that roll over periodically. As stock prices rise, they have to increase hedging, putting additional pressures on the currency.“Most foreign investors in Japan’s stock market are hedge funds and their pairing of equities trading with the yen is a significant factor,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo. “The Japanese stock market is a great place for short-term dealing with its deep liquidity and well-established infrastructure for high-frequency trades.”The proportion of Japanese share trading by overseas funds has climbed to the highest since at least 2005 and they now account for more than 60% of transactions, according to data from Japan Exchange Group Inc. The dominance of overseas funds is even more pronounced in derivatives, where they are responsible for almost 80% equity futures transactions.“Overseas speculators usually try to avoid taking both equity and currency risks,” said Takahiro Sekido, a former Bank of Japan official who is now a strategist at MUFG Bank Ltd. in Tokyo. “Their currency hedging supports the inverse correlation between the yen and Japanese stocks.”Hedging is typically undertaken by selling currency forwards or combining purchases of a currency in the spot market with a simultaneous sale in the forward market, known as a foreign-exchange swap. Such transactions between Tokyo-based banks and offshore market participants have more than doubled since 2006, data from the Tokyo Foreign Exchange Market Committee show.“The stock market can easily move by 10%, 20%, so currency hedging needs to be raised or reduced accordingly,” said Kengo Suzuki, chief foreign-exchange strategist at Mizuho Securities Co. in Tokyo.The increase in hedging -- along with the waning of haven demand and the Bank of Japan’s accommodative monetary policy -- has seen the yen weaken 1.9% against the dollar in the past month. The currency dropped to 109.29 per dollar last week, the lowest since Aug. 1, before trading at 109.03 on Wednesday in Tokyo.The increase in overseas trading of Japanese stocks and the related currency hedging is playing into another long-running theme: an inverse correlation between the yen and the Nikkei 225 Stock Average.The inverse correlation, which has prevailed almost continuously since 2006, is now close to the highest since November 2007, according to data compiled by Bloomberg.(Updates description in second paragraph, adds comment from analyst in seventh)\--With assistance from Toshiro Hasegawa.To contact the reporters on this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net;Shoko Oda in Tokyo at soda13@bloomberg.netTo contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net, Nicholas ReynoldsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Stocks Flirt With New High on Earnings, Trade Talk: Markets Wrap
(Bloomberg) -- U.S. equities hovered near record highs Tuesday before closing mostly lower as investors digested the latest earnings and economic data while awaiting more news about trade talks between America and China. Ten-year Treasury yields hit their highest since September, oil rose for a third day, and gold slipped below $1,500 an ounce.The S&P 500 Index declined from Monday’s record, with financial and energy shares leading gainers, while health-care and real estate firms lagged. The Dow Jones Industrial Average rose to a fresh record. News that U.S. service industries expanded more than forecast in October triggered a brief equity rally but dimmed hopes for a December rate cut from the Federal Reserve. The Stoxx Europe 600 Index nudged higher.Investors have been in a more bullish mood lately amid signs of progress in the trade war, which is alleviating one of the biggest headaches for markets as they approach year-end. Add in solid earnings and rebounding growth expectations, and a risk-on rotation has been taking hold. In the latest trade news, China is reviewing locations in the U.S. where President Xi Jinping would be willing to meet with President Donald Trump to sign a pact, people familiar with the plans said.“There was some enthusiasm around the trade headlines and people are just taking a step back and remembering that that story-line is very hard to predict,” said Craig Birk, chief investment officer at Personal Capital, which oversees $10 billion. “There’s just as much risk as there is cause for optimism on the so called phase one deal attempting to be hammered out.”Meanwhile, markets got further support after China’s central bank reduced the cost of one-year funds to banks for the first time since 2016, easing concerns about tightening liquidity. And Bank of Japan Governor Haruhiko Kuroda suggested his nation could issue more super-long term bonds, reflecting a desire for a steeper yield curve.Japanese shares led gains as Tokyo traders caught up after a long weekend, with more modest advances in Shanghai, Hong Kong and Seoul. Australia’s dollar rose after its central bank left interest rates unchanged and said past easing steps are offering support.Here are some key events coming up this week:Earnings are due from companies including: SoftBank and BMW on Wednesday; Walt Disney, Toyota, Deutsche Telekom on Thursday.Regional Federal Reserve presidents including Charles Evans, John Williams and Patrick Harker speak at events on Wednesday.A Bank of England monetary decision is due Thursday.The USDA World Agricultural Supply and Demand Estimates Report for November comes out Friday.These are the main moves in markets:\--With assistance from Ishika Mookerjee, Abhishek Vishnoi, Andreea Papuc and Yakob Peterseil.To contact the reporters on this story: Claire Ballentine in New York at cballentine@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Andrew Dunn, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Asian Shares Rise as Japan’s Nikkei Touches 2019 High; European Stocks Firm on Trade Deal Hopes
Japan’s Nikkei touched its 2019 highs following Wall Street’s record performance. Japan’s benchmark jumped to a 13-month high on Tuesday after a long weekend, as U.S. and Chinese trade negotiators moved closer to sealing a preliminary deal.
- Bloomberg
Decade-Long Bull Market Heating Up Again as Yearly Gain Hits 22%
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.It’s old, but it’s not slowing down.A bull market that traces its lineage to the depths of the financial crisis is revving up again, notching its fourth straight weekly gain and pushing its advance in 2019 past 22%. After wavering at mid-year amid a U.S.-China trade war and recession anxieties, American stocks are back in melt-up mode, ending three of the past five sessions at records.While nobody knows if it’s getting late for this decade-old rally, gains like these have been common at the tail end of bull markets past. A study by Bank of America Corp. on equity peaks since 1937 shows that being uninvested in the last year of an advance meant foregoing one-fifth of the rally’s overall return.The S&P 500 powered to a fresh high Friday after an unexpectedly strong hiring report offered hope that the labor market can propel consumer spending and extend the record-long expansion despite weak business investment and trade tensions. Stocks got a brief boost and the dollar pared losses after China’s Ministry of Commerce said trade negotiators had achieved a “consensus in principle” with the U.S.The latest economic data come after the Fed lowered rates Wednesday and signaled it is unlikely to make further changes, up or down, any time soon. That sent stocks to a record, before a batch of weak economic data and renewed worries over trade weighed on the measure Thursday. The S&P 500 is up 1.5% in the week. Fed Vice Chairman Richard Clarida reiterated in Bloomberg Radio interview that monetary policy is “in a good place” and the consumer is strong.The jobs report “reinforces the thesis that the economy is hanging in there with steady growth thanks to the consumer, jobs, low rates, strong housing and that the global picture is weak,” said Alec Young, managing director of Global Markets Research at FTSE Russell.Friday’s good news on the trade front follows a tough Thursday session that saw markets rattled as Chinese officials cast doubts about reaching a comprehensive long-term trade deal with the U.S.In earnings news, Exxon Mobil and Chevron reported solid results, while Alibaba Group Holding Ltd. rose after its report. European bonds slipped. Oil edged higher though headed for its biggest weekly loss in a month on swelling American stockpiles. Earlier, risk sentiment got a boost from better-than-expected Chinese manufacturing data, even as uncertainty remains over an interim trade deal. Gold fell after a 1% rally Thursday.“Markets participants, as well as maybe even the Fed, have been very optimistic” on the trade truce, Tiffany Wilding, chief U.S. economist at Pacific Investment Management Co., told Bloomberg TV. “We can see some more deterioration there.”These are the main moves in markets:StocksThe S&P 500 Index rose 1% as of 4 p.m. New York time.Th Dow Jones Industrial Average added 1.1%.The Stoxx Europe 600 Index gained 0.8%.The MSCI Asia Pacific Index gained 0.3%.The MSCI Emerging Market Index advanced 0.7%.CurrenciesThe Bloomberg Dollar Spot Index fell 0.1%.The euro rose 0.1% to $1.1167.The British pound was flat at $1.294.The Japanese yen fell 0.1% to 108.178 per dollar.BondsThe yield on 10-year Treasuries gained two basis points to 1.71%.The two-year yield added three basis points to 1.55%Germany’s 10-year yield gained three basis points to -0.382%.CommoditiesGold futures was flat at $1,510.70 an ounce.West Texas Intermediate crude gained 3.5% to $56.10 a barrel.\--With assistance from Alexandra Harris, Constantine Courcoulas and Reade Pickert.To contact the reporters on this story: Jeremy Herron in New York at jherron8@bloomberg.net;Claire Ballentine in New York at cballentine@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Yakob PeterseilFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Asian Shares Mixed; Private Survey Shows China’s Manufacturing Expanded
A private survey showed factory activity in China expanded in October with the Caixin/Markit PMI coming in at 51.7. Analysts polled by Reuters had expected the PMI number to come in at 51.0 from 51.4 for September.
- Bloomberg
Stocks Drop on Data, Trade Woes With Fed on Hold: Markets Wrap
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.U.S. stocks fell as weak manufacturing data and renewed concern on trade rattled markets adjusting to the Federal Reserve’s signal that it’s done easing. Treasuries, gold and the yen rose.The S&P 500 declined after a regional manufacturing gauge missed estimates and jobless claims rose more than forecast. The index was under pressure following a Bloomberg report that Chinese officials have warned they won’t budge on the thorniest trade issues. Apple Inc. and Facebook Inc., two of the four biggest U.S. companies, rose after earnings, preventing steeper losses in the major averages.In other stock moves:Kraft Heinz surged after it beat expectations.Wayfair plunged after its forecast missed.Hanesbrandes sank on weak earnings.Twilio tumbled when its sales outlook fell short of predictions.Twitter eased following a decision to drop political ads.Facebook rose as much as 5.2% and and Apple added as much as 2.4%.10 of 11 S&P 500 sectors slumped.Treasuries extended a rally that began Wednesday after the Federal Reserve cut rates and signaled it won’t consider raising them until inflation picks up. The 10-year yield slipped below 1.75%, as the bond market remains unconvinced the central bank is done easing, pricing in another cut by July. Data showed the Fed’s preferred inflation gauge matched the slowest pace since 2016, while U.S. consumer spending trailed forecasts.While the Fed’s signal that it won’t rush to raise rates buoyed risk assets Wednesday, the weak economic data and fresh trade uncertainty reminded investors the central bank also has no intention of easing further after three straight cuts.“There was a lot of complacency building in around trade over the last several weeks and China is reasserting a posture saying we’re not anywhere close to done,” Michael Purves, chief executive officer at Tallbacken Capital Advisors LLC, said by phone. “That’s why the market is off today and Treasuries are rallying. It’s not about some reinterpretation of what Powell said and did yesterday. If Powell is less inclined to underwrite the trade war, then sure that’s a potential risk factor.”Here are some key events coming up this week:Earnings include: Exxon Mobil and Macquarie Group on Friday.Friday brings the monthly U.S. non-farm payrolls report.These are the main moves in markets:\--With assistance from Katherine Greifeld.To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- FX Empire
Asia, Europe Present Mixed Reaction to Fed; Fiat, Peugeot Confirm Merger Deal
In China, factory activity contracted for the sixth straight month in October. The official Purchasing Managers’ Index (PMI) came in at 49.3 for October. In the United Kingdom, Prime Minister Boris Johnson and main opposition leader Jeremy Corbyn begin their first full day of campaigning Thursday ahead of what promises to be a historic December election.
