U.S. Stocks, Treasury Yields Fall as Oil Retreats: Markets Wrap

Updated on
  • Producer prices beat expectations ahead of inflation report
  • Gold turns higher, erasing drop, while copper futures fall
Mario Draghi, Janet Yellen, Haruhiko Kuroda and Mark Carney speak on guidance.

U.S. stocks slipped amid signs of a commodities glut and uncertain prospects for American tax cuts, while the dollar lost the most since September as the American yield curve flattened further ahead of inflation data.

The S&P 500 Index fell for the third time in four days. Energy and materials producers led losses as Bloomberg’s commodity index declined the most in six months. Crude slid the most in more a month after a tepid demand forecast. Miners led Europe’s equity benchmark to its longest slide in a year. The greenback touched a three-week low, while the euro soared on optimism over the region’s economy.

Investors will turn to data on U.S. consumer prices and retail sales Wednesday for clues on the strength of the world’s largest economy after the flattest American yield curve in a decade and weak data from China raised concern that growth is slowing. Volatility has increased since equities reached records a week ago, while credit spreads have widened as a sense of caution gripped global markets.

The House may vote on its version of the tax cut bill as soon as Thursday, while the Senate continues to hammer out its take. Goldman Sachs Group Inc. said in a note Tuesday the debate is moving faster than they expected, boosting the odds that tax reform will be enacted by early next year to 80 percent from 65 percent.

Terminal users can read more in our Markets Live blog.

Here are some key events investors are watching this week:

  • BOE officials address the bank’s future on Thursday, while Draghi speaks a second time Friday. 
  • A string of Fed appearances may further illuminate the FOMC’s commitment to a December hike.
  • U.S. CPI and retail sales data will be released Wednesday morning

These are the main moves in markets:

Stocks

  • The S&P 500 Index dropped 0.2 percent to 2,578.91 as of 4 p.m. New York time.
  • The Stoxx Europe 600 Index sank 0.6 percent, after hitting the lowest in seven weeks with its sixth consecutive decline.
  • The MSCI All-Country World Index fell 0.1 percent.
  • The MSCI Emerging Market Index declined 0.4 percent.

Currencies

  • The Bloomberg Dollar Spot Index decreased 0.5 percent, touching lowest in almost three weeks on the largest dip since Sept. 7.
  • The euro climbed 1.1 percent to $1.1794, reaching the strongest in almost three weeks on its fifth consecutive advance.
  • The British pound gained 0.4 percent to $1.3168.

Bonds

  • The yield on 10-year Treasuries fell three basis points to 2.3771 percent, the first retreat in a week.
  • Germany’s 10-year yield declined two basis points to 0.39 percent, the biggest drop in more than a week.
  • Britain’s 10-year yield dropped one basis point to 1.321 percent.

Commodities

  • Gold rose 0.2 percent at $1,281 an ounce.
  • West Texas Intermediate crude fell 2.1 percent to $55.55 a barrel.

— With assistance by Sarah Ponczek, and Samuel Potter

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