eBusiness Weekly
LONDON – World stocks slipped on Monday as investors braced for a blizzard of earnings from the world’s largest firms, while keeping a wary eye on U.S. bond yields as they approach peaks that have triggered market spasms in the past.
The yield on 10-year U.S. Treasuries hit its highest level since January 2014 at 2.9790 percent in early European trade, as the spread over the German equivalent briefly touched its widest level in 29 years.
Traders were also getting a global round of economic surveys that should show if economic softness in the first quarter was just a passing phase linked to wintery weather and the Lunar New Year holidays.
Readings from Japan, France and Germany were all relatively reassuring. Japan’s PMI firmed as output and domestic demand picked up, France was helped by its services sector, while Germany was also above forecast despite weaker new orders numbers.
“It’s a good reading, it’s still encouraging,” said Chris Williamson, chief business economist at IHS Markit, of the combined euro zone numbers, which he said pointed to quarterly GDP growth of 0.6 percent.
On the geopolitical front, there was plenty to digest too.
Signs that U.S.-China relations may be thawing were offset somewhat as President Donald Trump cautioned the North Korean nuclear crisis was a long way from being resolved, a day after the North pledged to end its nuclear tests.
Oil prices edged down in early trade but were not far from their highest since late 2014. The market had wobbled on Friday when Trump tweeted criticism of OPEC’s role in pushing up global prices, but quickly steadied.
Brent crude oil futures LCOc1 were off 20 cents at $73.83 per barrel, while U.S. crude CLc1 eased to $68.16.
In stock markets, MSCI’s world index fell 0.2 percent after Asia shed 0.5 percent overnight and Europe then slipped 0.3 percent as results from Switzerland’s biggest bank, UBS, disappointed and the rise in yields put pressure on bond-proxy sectors.
E-Mini futures for the S&P 500 ESc1 were also pointing to lower start for Wall Street later. More than 180 companies in the S&P 500 are due to report results this week including Amazon, Alphabet, Facebook, Microsoft, Boeing and Chevron. – Reuters
