Global Stocks Tank Amid North Korea, China Worries
A possible nuclear test in North Korea and lingering concerns over China worry investors
By Riva Gold
Updated Jan. 6, 2016 7:28 a.m. ET
0 COMMENTS
Concerns over China, news of a possible nuclear test in North Korea and a steep fall in oil prices combined to send global stocks lower on Wednesday, extending the shaky start to this year.
Futures pointed to a 1.4% opening loss for the S&P 500. Changes in futures do not necessarily reflect market moves after the opening bell.
The Stoxx Europe 600 was down 1.2% late morning, led lower by the resources sector as Brent crude fell to an 11-year low and the price of copper declined.
Investors shed risky assets and bought into haven investments, spooked by lackluster Chinese services data released on Wednesday. Those concerns were a large factor in oil’s decline, as mounting concerns over China’s economy spread across markets.
“The slowdown in China and its effect more broadly on emerging markets will still be a major theme in the global equity market this year,” said David Lafferty, chief market strategist at Natixis Global Asset Management
The Shanghai Composite Index ended up 2.3% Wednesday, but its near 7% plunge at the start of the week has left investors on edge.
Related
Oil Prices Fall to 11-Year Low
Gold Rises Amid Tensions
What to Watch in the Fed’s December Minutes
China’s central bank has intervened in markets to soothe fears and prop up the country’s economy. On Wednesday, the bank fixed the yuan at a five-year low against the U.S. dollar. Regulators also tried to reassure markets that a ban on selling stocks by large stakeholders due to expire on Friday will not have the catastrophic effect that many in the market fear.
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For European equities “China is the only story,” said Tristan Abet, investment strategist at Louis Capital Markets. “If you’re a bear on China and the yuan, you can’t be bullish on Europe,” he said.
Elsewhere in Asian trade, Australia’s S&P ASX 200 fell 1.2%, while Hong Kong’s Hang Seng Index fell 1%, deepening a week of losses for both indexes.
Japan’s Nikkei Stock Average closed down 1%.
A news report in South Korea about an earthquake near North Korea's nuclear facility on Wednesday. ENLARGE
A news report in South Korea about an earthquake near North Korea's nuclear facility on Wednesday. Photo: Associated Press
Adding to the investors’ concerns, North Korea on Wednesday said it successfully staged its first test of a more powerful form of nuclear weapon.
“On the political front, confirmation of an apparently successful nuclear test by North Korea weighed on already fragile sentiment in the region,” Sam Hill, an economist at RBC Capital Markets, wrote in a note.
Among traditional safe haven assets, gold was up 0.5% at $1,083.30 a troy ounce, and the yen neared a three-month high against the dollar.
Investors also moved into the relative safety of government debt. Ten-year U.S. Treasury yields were 0.04 percentage point lower at 2.196% and 10-year German yields fell by a similar amount to 0.504%. Yields fall as prices rise.
In commodities, Brent crude fell 3.6% to $35.10 a barrel. The fall is ahead of weekly U.S. crude inventory and production data later in the day. In metals, copper was down 0.4% at $4625 a metric ton in London trade.i can
Commodity investors also continue to weigh a strong dollar, recent tensions between Saudi Arabia and Iran, and the latest manufacturing releases from China and the U.S.
Commodities-linked stocks were helping to lead Europe lower. European energy stocks were last down 1.4%, while the basic materials sector was down 2.8%. Shares in BHP Billiton were down 4.8% and Rio Tinto PLC lost 4.1%.
The euro was down 0.1% against the dollar at $1.0729 after the eurozone composite purchasing managers index was revised up. The dollar was last down 0.6% against the yen at ¥118.4380.
Wall Street closed a touch higher on Tuesday, as markets steadied after a sharp selloff earlier in the week.
Later Wednesday, investors will parse the ADP employment report and U.S. trade gap data for clues on the health of the U.S. economy.
Federal Reserve Chairwoman Janet Yellen speaks at a news conference in Washington D.C. last month. ENLARGE
Federal Reserve Chairwoman Janet Yellen speaks at a news conference in Washington D.C. last month. Photo: Bao Dandan/Zuma Press
Investors will also be returning to the subject that dominated trade last year: U.S. monetary policy. Minutes from the U.S. Federal Reserve’s December policy meeting, where officials voted to raise benchmark interest rates for the first time in nearly a decade, will be released later Wednesday.
If there is any more detail around what Janet Yellen means by a “gradual” path for future interest rate increases, that will definitely have implications for equity markets over the course of the year, said Mr. Lafferty.
“Any indication that they’re in a hurry to raise rates [will be] bad for stocks,” he said.
A possible nuclear test in North Korea and lingering concerns over China worry investors
By Riva Gold
Updated Jan. 6, 2016 7:28 a.m. ET
0 COMMENTS
Concerns over China, news of a possible nuclear test in North Korea and a steep fall in oil prices combined to send global stocks lower on Wednesday, extending the shaky start to this year.
Futures pointed to a 1.4% opening loss for the S&P 500. Changes in futures do not necessarily reflect market moves after the opening bell.
The Stoxx Europe 600 was down 1.2% late morning, led lower by the resources sector as Brent crude fell to an 11-year low and the price of copper declined.
Investors shed risky assets and bought into haven investments, spooked by lackluster Chinese services data released on Wednesday. Those concerns were a large factor in oil’s decline, as mounting concerns over China’s economy spread across markets.
“The slowdown in China and its effect more broadly on emerging markets will still be a major theme in the global equity market this year,” said David Lafferty, chief market strategist at Natixis Global Asset Management
The Shanghai Composite Index ended up 2.3% Wednesday, but its near 7% plunge at the start of the week has left investors on edge.
Related
Oil Prices Fall to 11-Year Low
Gold Rises Amid Tensions
What to Watch in the Fed’s December Minutes
China’s central bank has intervened in markets to soothe fears and prop up the country’s economy. On Wednesday, the bank fixed the yuan at a five-year low against the U.S. dollar. Regulators also tried to reassure markets that a ban on selling stocks by large stakeholders due to expire on Friday will not have the catastrophic effect that many in the market fear.
Advertisement
For European equities “China is the only story,” said Tristan Abet, investment strategist at Louis Capital Markets. “If you’re a bear on China and the yuan, you can’t be bullish on Europe,” he said.
Elsewhere in Asian trade, Australia’s S&P ASX 200 fell 1.2%, while Hong Kong’s Hang Seng Index fell 1%, deepening a week of losses for both indexes.
Japan’s Nikkei Stock Average closed down 1%.
A news report in South Korea about an earthquake near North Korea's nuclear facility on Wednesday. ENLARGE
A news report in South Korea about an earthquake near North Korea's nuclear facility on Wednesday. Photo: Associated Press
Adding to the investors’ concerns, North Korea on Wednesday said it successfully staged its first test of a more powerful form of nuclear weapon.
“On the political front, confirmation of an apparently successful nuclear test by North Korea weighed on already fragile sentiment in the region,” Sam Hill, an economist at RBC Capital Markets, wrote in a note.
Among traditional safe haven assets, gold was up 0.5% at $1,083.30 a troy ounce, and the yen neared a three-month high against the dollar.
Investors also moved into the relative safety of government debt. Ten-year U.S. Treasury yields were 0.04 percentage point lower at 2.196% and 10-year German yields fell by a similar amount to 0.504%. Yields fall as prices rise.
In commodities, Brent crude fell 3.6% to $35.10 a barrel. The fall is ahead of weekly U.S. crude inventory and production data later in the day. In metals, copper was down 0.4% at $4625 a metric ton in London trade.i can
Commodity investors also continue to weigh a strong dollar, recent tensions between Saudi Arabia and Iran, and the latest manufacturing releases from China and the U.S.
Commodities-linked stocks were helping to lead Europe lower. European energy stocks were last down 1.4%, while the basic materials sector was down 2.8%. Shares in BHP Billiton were down 4.8% and Rio Tinto PLC lost 4.1%.
The euro was down 0.1% against the dollar at $1.0729 after the eurozone composite purchasing managers index was revised up. The dollar was last down 0.6% against the yen at ¥118.4380.
Wall Street closed a touch higher on Tuesday, as markets steadied after a sharp selloff earlier in the week.
Later Wednesday, investors will parse the ADP employment report and U.S. trade gap data for clues on the health of the U.S. economy.
Federal Reserve Chairwoman Janet Yellen speaks at a news conference in Washington D.C. last month. ENLARGE
Federal Reserve Chairwoman Janet Yellen speaks at a news conference in Washington D.C. last month. Photo: Bao Dandan/Zuma Press
Investors will also be returning to the subject that dominated trade last year: U.S. monetary policy. Minutes from the U.S. Federal Reserve’s December policy meeting, where officials voted to raise benchmark interest rates for the first time in nearly a decade, will be released later Wednesday.
If there is any more detail around what Janet Yellen means by a “gradual” path for future interest rate increases, that will definitely have implications for equity markets over the course of the year, said Mr. Lafferty.
“Any indication that they’re in a hurry to raise rates [will be] bad for stocks,” he said.
I'm in it to win it!
NASDAQ DIP and RIP
Here is the best word that describes what i do here.
Intuitive;
means having the ability to understand or know something without any direct evidence or reasoning process.
I was born with it, I'm truly blessed!
Alway's searching for winners'
NASDAQ DIP and RIP
Here is the best word that describes what i do here.
Intuitive;
means having the ability to understand or know something without any direct evidence or reasoning process.
I was born with it, I'm truly blessed!
Alway's searching for winners'
