Global Stocks Slip on Doubts About China-U.S. Tariff Talks
By Anna Isaac and Joanne Chiu
-- Hang Seng drops 1.8%
-- U.S. 10-year Treasury yield falls
-- U.S. stock futures slip
Global stocks moved lower Wednesday after stumbling blocks
emerged in trade talks between the U.S. and China.
Major indexes across Asia fell, and continuing political unrest
in Hong Kong drove the Hang Seng lower by 1.8%. Japan's Nikkei 225
was down 0.9%.
In Europe, the Stoxx Europe 600 dropped 0.4%, while other
regional indexes also slipped. The FTSE 100 fell 0.3%, while
Germany's DAX dropped 0.5%. U.S. stock futures slipped, with
contracts tied to the Dow Jones Industrial Average down 0.3%.
A question hanging over trade talks is whether Washington will
agree to remove existing tariffs on Chinese imports to secure an
initial deal with Beijing, rather than just lifting the threat of
further levies due Dec. 15.
"In the short term the market's been too optimistic. The best
interpretation of the trade situation is that almost everything
that can be tariffed has been tariffed," said Christopher Mahon,
director of asset allocation research at Barings.
Trade concerns weighed on assets that are sensitive to global
growth prospects. The benchmark for world oil prices, Brent crude,
fell 0.7% Wednesday. Shares in auto makers and parts providers,
which have been particularly exposed to trade tensions, fell 1.6%
on the Stoxx Europe 600.
Meanwhile, havens rallied. Yields on sovereign bonds fell. The
yield on the U.S. 10-year Treasury slipped to 1.883%, down from
1.909% Tuesday. Gold climbed 0.9%, and the Swiss franc was 0.3%
stronger against the dollar.
Shares in Tech Data rose 4.4% in premarket U.S. trading after it
agreed to be purchased by Apollo Global Management for $5.4
billion. Cloud-based data analytics company Datadog's shares rose
13% premarket after its earnings beat expectations. Skyworks
Solutions, which makes semiconductors and operates in both the U.S.
and China, fell 5% premarket after it said its revenue had fallen
in the fourth quarter.
Technology giant Cisco Systems will report earnings later
Markets will get an update on price growth in the U.S. on
Wednesday when the October consumer-price index is released by the
Labor Department. Later, Federal Reserve Chairman Jerome Powell
gives testimony to Congress's Joint Economic Committee. Lines of
questioning for Mr. Powell might include the Fed's expected pause
on interest-rate cuts and the overall health of the U.S.
Separately, policy makers Neel Kashkari of the Minneapolis Fed
and Thomas Barkin of the Richmond Fed are also set to deliver
Stocks fell in Hong Kong as unrest gripped the city, including
parts of the financial district, for a third straight weekday.
"The escalation of violence has caused some market jitters,"
said Daryl Liew, head of portfolio management at REYL
The Hang Seng's fall Wednesday put its losses this week to 3.9%.
Insurer AIA Group led declines on the flagship index with a 3.2%
fall. Selling financial products to mainland visitors in Hong Kong
is an important line of business for AIA. Elsewhere, real-estate
firm Sun Hung Kai Properties shed 2.4%.
Mr. Liew said global shares were richly valued and uncertainties
over global growth and the trade talks could dent investors' risk
In Europe, banks were the worst performing sector in the Stoxx
Europe 600, down 2.4%. The drop was led by Spanish banks, after the
leading socialist party, Podemos, moved toward forming a new
Podemos has pledged to raise taxes on banks and block
privatizing Bankia SA's, one of the country's largest lenders. Its
shares fell 5%. Banco Santander SA dropped 4.2%.
Write to Anna Isaac at email@example.com and Joanne Chiu at
(END) Dow Jones Newswires
November 13, 2019 08:44 ET (13:44 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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