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TEHRAN, November 05 -World stocks slipped on Monday, halting a four-day recovery rally as anxiety surrounding global trade conditions and rising U.S. interest rates dampened risk appetite.
TEHRAN, Young Journalists Club (YJC) -World stocks slipped on Monday, halting a four-day recovery rally as anxiety surrounding global trade conditions and rising U.S. interest rates dampened risk appetite.
European shares followed Asia lower as investors readied for U.S. congressional midterm elections on Tuesday, while sterling briefly climbed on a newspaper report that a Brexit agreement was imminent.
Oil prices fell as the reimposition of U.S. sanctions against Iran’s fuel exports was softened by waivers that will allow some countries to still import Iranian crude, at least temporarily.
U.S. stock futures were down 0.3 percent amid concerns a trade deal between the United States and China may not be struck soon. ESc1 NQc1
“After a four-day rally people tend to become a bit exhausted - and just generally I feel like everyone’s on hold until the (end-November) G20 and also the Fed coming up,” said Gregory Perdon, chief investment officer at Arbuthnot Latham.
“Our sense is absolutely that there’s a lot of cash on the sidelines right now.”
Overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 1.2 percent, slipping back toward last week’s 18-month trough.
Chinese blue-chips fell after White House economic adviser Larry Kudlow denied Washington has drafted a trade agreement with Beijing.
President Xi Jinping acknowledged conditions abroad had created some challenges for the Chinese economy, but promised to lower import tariffs and continue to broaden market access.
“The market hasn’t been paying as close attention as they might normally because they’ve been a bit distracted by the specter of a trade war. But the policy response out of China has been massive,” said Arbuthnot Latham’s Perdon.
Emerging stocks .MSCIEF tumbled 0.9 percent.
With the Federal Reserve meeting on Wednesday and Thursday, the prospect of even tighter U.S. monetary policy after strong economic data is also on investors’ minds.
Markets are now pricing in a higher probability of a December rate hike with further tightening to 2.75-3.00 percent seen through 2019.
Tighter monetary policy, a stronger dollar, and trade tariffs have created what Citi strategists call “Trump’s triple tightening” this year.
“This ...has slowed growth and raised risks around the world,” they wrote.
Investors were also cautious ahead of the U.S. midterm elections.
Source: Reuters
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