U.S. Stocks, Dollar Fall After Chinese Trade Data: Markets Wrap

(Bloomberg) -- Sign up for China Rising, a new weekly dispatch on where China stands now and where it's going next.

U.S. stocks declined as weak Chinese trade data fueled concerns about slowing global growth. Treasuries were little changed and the dollar dropped.

The S&P 500 fell for only the third time this month, led by technology companies after China’s slumping exports fueled worries about the growing impact of the U.S.-China trade war on worldwide growth. Drugmakers slid amid a probe by U.S. lawmakers into pricing, while PG&E plunged 54 percent after the utility said it will file for bankruptcy. Citigroup said the trading environment was starting to improve, helping to boost the bank’s stock and other financial shares.

The 10-year Treasury yield pared an early decline to trade higher, while the dollar fell against most major currencies. In Europe, the Stoxx Europe 600 Index snapped four days of gains, also dragged lower by tech. The euro was steady following data showing industrial output slowed, and the pound rose before Tuesday’s crucial vote on Brexit.

“There are two macro events that continue to weigh on market perspective,” Frances Donald, head of macroeconomic strategy at Manulife Asset Management, said in an interview. “The first is where is global growth heading next, and weak Chinese trade data would suggest that global growth is certainly not bottomed as of yet. And the second issue is the persistence of the U.S. government shutdown and how that muddies our perspective about what happens next.”

This month’s buoyancy in global equities, triggered by signs of progress in U.S.-China trade talks and dovish commentary from Federal Reserve officials, faces a test with the Chinese data underscoring the impact of the trade spat. The next hurdles to clear will be a slew of U.S. bank profit reports at the start of the earnings season, amid worries global growth is slowing. Also weighing on sentiment is the partial U.S government shutdown that’s entered its fourth week.

Elsewhere, West Texas Intermediate crude traded around $51 a barrel. Emerging-market currencies and shares fell.

Terminal users can read our Markets Live blog.

Here are some important events coming up:

• Some of the world’s biggest banks announce earnings, including JPMorgan, Bank of America, Wells Fargo, Morgan Stanley and Goldman Sachs. Alcoa, Indian IT company Mindtree, Netflix, Taiwan Semiconductor, American Express and BlackRock also post results.

These are the main moves in markets:

Stocks

• The S&P 500 Index declined 0.5 percent as of 4 p.m. New York time.
• The Nasdaq Composite Index dropped 0.9 percent, falling for a second session.
• The Stoxx Europe 600 Index fell 0.5 percent, the first retreat in a week.
• The MSCI All-Country World Index decreased 0.4 percent, the first retreat in more than a week.
• The MSCI Emerging Market Index sank 0.8 percent, the biggest drop in more than a week.

Currencies

• The Bloomberg Dollar Spot Index fell 0.1 percent.
• The euro was steady at $1.1467.
• The Japanese yen gained 0.3 percent to 108.20 per dollar.
• The British pound gained 0.1 percent at $1.2861.
• The MSCI Emerging Markets Currency Index sank 0.1 percent.

Bonds

• The yield on 10-year Treasuries were steady at 2.70 percent
• Germany’s 10-year yield decreased one basis point to 0.23 percent.
• Britain’s 10-year rose basis point to 1.297 percent.

Commodities

• The Bloomberg Commodity Index rose 0.3 percent.
• West Texas Intermediate crude fell 1.9 percent at $50.60 a barrel.
• Gold increased 0.2 percent to $1,291.70 an ounce.

--With assistance from Sarah Ponczek and Eddie van der Walt.

To contact the reporters on this story: Randall Jensen in New York at rjensen18@bloomberg.net;Reade Pickert in New York at epickert@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Yakob Peterseil, Brendan Walsh

©2019 Bloomberg L.P.