Global stocks fell Tuesday, oil fell and a security offering supported the US dollar as latent Sino-US tensions and new restrictions on coronaviruses in California kept investors optimistic with the profit season In progress.
The MSCI All Country World Index fell 0.4% after hitting a 20-week high on Monday. The pan-European STOXX 600 opened 1.5% lower and was heading for its worst day in 14 sessions after technology stocks fell 3.4%. This followed a collapse a day earlier in the technology-intensive Nasdaq.
One of the winners was the German meal kit delivery company Hellofresh, which rose 4.3% as it increased its sales forecast for the year.
The largest MSCI index of Asia-Pacific stocks excluding Japan fell 0.9%. Chinese stocks fell despite better than expected trade figures. The US dollar strengthened slightly.
These measures followed a massive sale on Wall Street after California governor Gavin Newsom ordered the closure of bars and restaurants and movie theaters to cease operations indoors.
The S&P 500 futures were 0.5% stronger after the index lost 0.9% on Monday.
Tension has increased between Washington and Beijing after the United States rejected China’s disputed claims over offshore resources in much of the South China Sea.
The Trump administration also plans to abandon a 2013 audit agreement that could herald a broader crackdown on Chinese companies listed in the United States.
“It’s not just the pace that is accelerating, but the aspect of so many areas that are drawn to the dispute,” said Vishnu Varathan, director of economics at Mizuho Bank in Singapore.
“The last time was really about results,” he said, adding that what used to be primarily a trade dispute is now much broader, making resolution less likely and next steps less predictable. .
The Shanghai index fell 0.7% despite official figures showing that Chinese exports and imports exceeded forecasts in June, while China continued to buy significant quantities of basic products, including iron-ore.
The return of restrictions to California is also opening up questions about whether the coronavirus can further harm the economy. Infections worldwide have jumped by a million in five days and exceed 13 million.
ALL ABOUT 2021
Oil prices, an indirect indicator of global energy consumption and growth expectations, have reflected these concerns. Futures on US crude fell 1.5% to $ 39.52 per barrel and futures on Brent fell 1.3% to $ 42.16 per barrel.
Investors have sought the security of eurozone government bonds. Most yields fell by around 2-3 basis points, the yield on the 10-year German Bund, the benchmark for the region, falling 2.5 basis points to -0.43%.
There are also signs of an interruption in the constant flow of better than expected economic data. Data on Tuesday showed that Singapore went into recession last month, with the economy contracting 41.2% for the quarter, worse than analysts had forecast 37.4%.
Currency markets limited the dollar within a narrow range. Against a basket of currencies, the dollar index was up 0.1% to 96.662. The euro was down 0.1% against the dollar at $ 1.1333.
Currencies exposed to the global trade climate, such as the Australian dollar and the Chinese offshore yuan, were in decline.
The focus is later on American results, with JP Morgan, Citigroup, Wells Fargo and Delta Air Lines which should report on Tuesday to a market that already anticipates 2021 and beyond.
“It’s really around 2021 – 2020 is over,” said fund manager Hugh Dive, chief investment officer at Atlas Funds Management in Sydney, where the profit season starts off right next month.
“Outlook statements are what the market will look at,” he said. “If a company surprises on the upside with its 2020 revenues but has shaky comments for 2021 … it won’t be rewarded for that.” “
Spot gold fell 0.2% to $ 1,798.79 an ounce as the dollar strengthened.
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