U.S. Stocks Decline, Bonds Mixed on Trade Jitters: Markets Wrap

All you need to know about global markets today.

Sam Potter

10 Dec 2019, 07:09 PM IST

U.S. Stocks Decline, Bonds Mixed on Trade Jitters: Markets Wrap

Traders work on the floor of the New York Stock Exchange (NYSE) in New York,U.S. (Photographer: Griselda San Martin/Bloomberg)

(Bloomberg) -- U.S. stocks fell in thin trading as investors turned cautious ahead of a week full of potential catalysts, from central bank meetings to a looming tariff deadline. Treasury 10-year notes held modest gains.

The S&P 500 ended at session lows in volumes below the 30-day average. Weak China export data added to concern, with investors awaiting news on whether Washington will go ahead with a planned Dec. 15 tariff hike. The Stoxx Europe 600 Index retreated. Stock indexes posted modest increases in Tokyo and Seoul, though gains mostly fizzled in Hong Kong and Shanghai.

The pound edged higher as polls continued to show the U.K. Conservative Party on course to win a majority in Thursday’s election, which would likely mean Britain leaving the European Union by Jan. 31. Gold and the yen were also slightly higher.

With time running out for the U.S. and China to reach a deal that would ward off an escalation in tariffs, markets will be watching closely for any signs of progress. White House economic adviser Larry Kudlow said Friday the two sides are haggling over the amount of American farm products Beijing is willing to purchase. Data showed China’s exports fell 1.1% in November, with those to the U.S. tumbling 23%, underscoring why the Asian nation may want to resolve the dispute.

“There’s no upside risks on the horizon,” Katrina Ell, an economist at Moody’s Analytics, said on Bloomberg TV. “It is weighted to the downside and that big downside risk is coming from the trade war.”

Also in focus for investors this week will be central banks, with policy meetings at the Federal Reserve and the European Central Bank that may offer clues on whether more monetary easing is in store in 2020.

Elsewhere, oil slipped, trimming last week’s rally spurred by Saudi Arabia promising significant additional production cuts beyond what was agreed with fellow OPEC+ members.

Here are some key events to watch this week:

The Federal Reserve decides on interest rates on Wednesday, followed by a press briefing from Chairman Jerome Powell.
China reports on inflation Tuesday, and data on credit growth is due at some point in the coming week
The next European Central Bank policy decision is on Thursday.
The U.K. holds a general election Thursday.

These are some of the main moves in markets:

Stocks

The S&P 500 Index declined 0.3% to 3,135.96 as of 4 p.m. New York time.

The Nasdaq Composite Index fell 0.2% to 8,636.72.

The Dow Jones Industrial Average decreased 0.3% to 27,942.76.

The MSCI All-Country World Index dipped 0.1% to 547.84.

Currencies

The Bloomberg Dollar Spot Index fell 0.1% to 1,199.94.

The Japanese yen was little changed at 108.62 per dollar.

The euro was little changed at $1.1065.

Bonds

The yield on two-year Treasuries gained one basis point to 1.62%, the highest in more than a week.

The yield on 10-year Treasuries dipped one basis point to 1.83%.

Germany’s 10-year yield fell two basis points to -0.31%.

Italy’s 10-year yield decreased eight basis points to 1.276%, the lowest in more than a week.

Commodities

West Texas Intermediate crude fell 0.4% to $58.97 a barrel, the biggest fall in more than a week.

Gold futures were flat at $1,465.10 an ounce.

Brent crude fell 0.4% to $64.12 a barrel, the biggest fall in more than a week.

What’s your 2020 vision? Terminal users are invited to join the Markets Live blog’s survey.

--With assistance from Vildana Hajric.

To contact the reporter on this story: Sam Potter in London at spotter33@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Yakob Peterseil