“U.S. Stocks Fluctuate as Intense Week Kicks Off: Markets Wrap.”
U.S. equities retreated from early highs while European stocks rose as investors eased into a hectic week, during which three major central banks set interest rates, President Donald Trump meets North Korea’s leader and Brexit returns to the fore.
The S&P 500 Index gained a bit at the start of trading, led by financials and consumer discretionary shares, while the Dow Jones Industrial Average was little changed. The dollar rose with Treasury yields.
In Europe, the mood was cautiously risk-on, with the Stoxx Europe 600 Index rising for the first time in five days and core European bonds slipping. The euro strengthened and Italian bonds and stocks jumped after the country’s new finance minister confirmed his commitment to the common currency. The pound fell in what could be a key week for Theresa May’s Brexit strategy, and as data showed a slump in U.K. manufacturing.
Investors are steeling themselves for more geopolitical noise as the week picks up, with Trump saying he feels “very good” about the summit with Kim Jong Un in Singapore. After that, traders will switch their focus to the views of the world’s biggest central banks. The Federal Reserve is expected to raise interest rates Wednesday, while European Central Bank officials are poised to hold formal talks on ending its bond-buying program Thursday. The Bank of Japan meets Friday, with no change to policy expected.
Earlier in Asia, shares in Japan, Hong Kong and South Korea showed modest advances while Chinese stocks underperformed. Australian markets were shut for a holiday. Meanwhile, Canada’s dollar fell in the wake of the G-7 meeting, which ended with deepening tensions over U.S. tariffs and a dispute between Trump and Prime Minister Justin Trudeau.
“Out of the G-7 summit the markets do not seem to currently place a high importance on the rhetoric — post-summit Trudeau news conference and U.S. retort — but see it as part of a broader negotiation,” Ernie Cecilia, chief investment officer at Bryn Mawr Trust Co., said in an email. “The focus immediately shifts to Singapore, the results of which may carry more weight on near-term market behavior.”
Elsewhere, West Texas oil extended a drop in the wake of news that the number of rigs drilling for crude in the U.S. inched up and amid speculation that Russia boosted production. Bitcoin traded near a two-month low following a hacking incident at South Korean cryptocurrency exchange Coinrail.
“’Fair trade, fool trade’, Trump’s tweets spew ire on NATO allies, Trudeau.”
U.S. President Donald Trump fired off a volley of tweets on Monday venting anger on NATO allies, the European Union and Canadian Prime Minister Justin Trudeau in the wake of a divisive G7 meeting over the weekend.
The escalating clash over trade between Washington and some of its closest global partners cast a cloud over Trump’s efforts to make history in nuclear talks in Singapore on Tuesday with Kim Jong Un of North Korea, one of America’s bitterest foes.
Having left the Group of Seven summit in Canada early, Trump’s announcement that he was backing out of the joint communique torpedoed what appeared to be a fragile consensus on the trade dispute between Washington and its top allies. “Fair trade is now to be called fool trade if it is not reciprocal,” said Trump, who flew from Canada to Singapore on Sunday to prepare for the first-ever summit between a U.S. and North Korean leader.
The communique, which had appeared to have papered over the cracks that surfaced so uncharacteristically at the G7, said the leaders of the United States, Canada, Britain, France, Italy, Germany and Japan were agreed on the need for “free, fair, and mutually beneficial trade” and the importance of fighting protectionism.
Trump’s extraordinary outburst on Monday against NATO allies, the European Union and Canada appeared aimed at striking a chord with voters who support his “America First” agenda.
At the same time, however, it put Trump in the position of going into a crucial summit at odds with countries he needs on his side to pressure North Korea to move toward dismantling a nuclear arsenal that threatens the United States.
The prospect that Trump could be moving toward an even greater protectionist trade policy is likely to chill financial markets worried about tit-for-tat escalation that could lead to a full-blown global trade war.
“Bitcoin Falls After Korean Exchange Hacked.”
Bitcoin extended losses for a third day, tumbling as much as 12 percent Sunday as South Korean cryptocurrency exchange Coinrail said there was a “cyber intrusion” in its system.
The largest cryptocurrency declined to $6,840 as of 4 p.m. in New York, the biggest drop since March 14, according to data compiled by Bloomberg from Bitstamp pricing. That widens Bitcoin’s losses for the year to 52 percent. Peer cryptocurrencies Ethereum and Ripple fell 10 percent and 11 percent, respectively.
Coinrail confirmed in a statement on its website that some of the exchange’s digital currency appears to have been stolen by hackers, but it did not quantify its value. Coinrail only said that it was cooperating with investigators and other exchanges to try and track down the perpetrators and recover the money.
The central security problem with digital currencies is that the money itself is typically represented by little more than a unique numerical code, which means the owner is wiped out if that data is ever stolen.
Coinrail said it’s reviewing its system due to hacking attempts. The exchange said it has managed to freeze all exposed NPXS, NPER and ATX coins, and that other cryptocurrencies are now being kept in a cold wallet. The statement is the only content available on the exchange’s homepage, and contact information could not immediately be located.
The exchange trades more than 50 different cryptocurrencies and was the 98th largest, with a 24-hour volume of about $2.65 million, according to data from Coinmarketcap.com.
“Pound falls on weak economic figures.”
The pound has fallen sharply following data suggesting a sluggish economy. anufacturing output fell 1.4% in April, the biggest fall for nearly six years, according to the Office for National Statistics (ONS). nother ONS report showed only a modest rebound in construction output, after a sharp contraction in March.
The pound fell three quarters of a cent after the data was released to $1.3350. Analysts say the data has eased pressure for a rise interest rates.
Manufacturing output fell by 1.4% in April compared with March, the biggest month-on-month fall since October 2012. The wider measure of industrial output also fell, dropping by 0.8% in April.
Construction output rose by 0.5% month-on-month in April, having fallen by 2.3% in March. Trade data was also released on Monday. The UK’s trade deficit in April was the widest since September 2016 driven in particular by falls in exports of aircraft, pharmaceuticals and machinery. The deficit in goods and services widened to £5.28bn from £3.22bn in March. he goods trade deficit widened to £14.04bn in April – the biggest since September 2016.