U.S. Stocks Slip From Records as Oil, Dollar Slump: Markets Wrap

  • Sterling shrugs off early loss in wake of London attack
  • Mexican peso rallies on state election; oil erases advance

Algebris CEO Says Markets Being Rational on Terror

U.S. stocks slipped from all-time highs, while the dollar slumped with crude as a caution prevailed at the start of a week full of events that could set the tone on financial markets.

The S&P 500 Index swung between gains and losses before closing lower as gains in banks failed to offset weakness in defensive shares. Miners weighed on European equities, as zinc and tin led base metals lower. Some European markets were closed for a public holiday. Mexico’s peso traded at the strongest level in seven months. Oil erased gains sparked by a political spat between several energy-producing nations in the Middle East.

Markets showed little reaction to the diplomatic tensions in the Middle East and the latest terror attack in London, though a slew of events lie ahead, including the U.K. vote Thursday. The European Central Bank also meets this week and former FBI head James Comey will testify to Congress. The key for the assets may be how investors gauge the strength of global economic growth and its ability to withstand rising borrowing costs or an end to the era of easy central bank cash. 

  • Comey’s testimony may offer clues to how the probe into the Trump campaign’s contact with Russian officials will impact the administration’s ability to push through its policy agenda.
  • Surveys of U.K. voters over the past few weeks have indicated a tightening race, increasing the chance that Prime Minister Theresa May might not bolster her majority.
  • Mario Draghi holds forth after Thursday’s ECB meeting. Don’t expect policy changes, but the bank may drop the reference to “downside” risks to growth, while reiterating a weak inflation outlook, Bloomberg Intelligence said.
  • Policy decisions from central banks in India and Australia are due during the week, as well as data on Chinese trade and inflation, European industrial output figures and GDP reports for Australia, Japan and the euro area.

Read our Markets Live blog here.

Here are the main moves in markets Monday:

Stocks 

  • The S&P 500 fell 0.1 percent to 2,436.21 at 4 p.m. in New York, falling from a record set Friday. Utility and materials shares led losses.
  • The Dow Jones Industrial Average and Nasdaq Composite Index also slipped from all-time highs. Apple Inc. lost 1 percent after unveiling new products and software.
  • The Stoxx Europe 600 Index declined 0.1 percent with basic resources producers down 0.6 percent.
  • MSCI’s emerging-market index added 0.2 percent. The measure is higher by 18 percent in 2017.

Commodities

  • West Texas Intermediate crude declined 0.6 percent to settle at $47.40 a barrel in New York, after dropping 1.5 percent on Friday. The Monday settlement was the lowest in more than three weeks.
  • Gold rose 0.3 percent to $1,283.80 an ounce.
  • Copper fell 0.5 percent to $5,636 a ton and zinc traded 1.4 percent lower at $2,492 a ton on the London Metal Exchange.
     

Currencies 

  • The Bloomberg Dollar Spot Index dropped 0.2 percent, adding to a 0.4 percent decline on Friday. The yen fell 0.1 percent to 110.485 per dollar. Japan’s currency climbed 0.9 percent Friday after the U.S. data.
  • The Mexican peso jumped 1.9 percent. President Enrique Pena Nieto’s party forged ahead in the election for governor of Mexico’s largest state.
  • The pound climbed 0.2 percent after erasing an earlier loss. The euro fell 0.2 percent to $1.1256.

Bonds

  • The yield on 10-year Treasury notes rose two basis points to 2.18 percent after dropping five basis points on Friday.
  • U.K. benchmark yields climbed less than one basis point as investors moved past the terror incident in the capital.
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