Stocks Drop as Investors Mull Growth; Yen Climbs: Markets Wrap - Ester Holdings

Stocks Drop as Investors Mull Growth; Yen Climbs: Markets Wrap

Bloomberg.com — European stocks fell and U.S. equity futures pointed to a weaker open as investors digested warnings from the world’s financial leaders about the impact of protectionism on growth. The yen rose and Japanese government bonds slid on speculation about the Bank of Japan’s stimulus.

Travel companies were the biggest losers in the Stoxx Europe 600 Index after Ryanair posted a 20 percent decline in first quarter profit, while futures on the S&P 500 and Nasdaq were in the red as the finance chiefs from the Group of 20 nations on Sunday warned trade tensions threaten expansion as leading economies fall out of sync. The dollar and Treasuries were steady. Japanese government bonds plunged and the yen rose on reports of possible changes to the nation’s ultra-loose monetary policy, which spurred the central bank to offer to buy an unlimited amount of bonds at a fixed-rate operation. European bonds also fell.

The world’s finance chiefs said global growth remains robust and many emerging-market countries are better prepared to face crises, but risks to the world economy have increased. Also rattling investors, Trump took issue with the yuan’s six-week slide to the lowest level in more than year, raising concerns among investors that the U.S.-China trade war is now spilling over into currency markets. The ratcheting up of rhetoric is offsetting a mixed earnings season, which continues on Monday with Alphabet the main focus.

“The current U.S. administration has a clear preference for lower U.S. dollar rates and a weaker currency,” Australia & New Zealand Banking Group Ltd. strategists led by Daniel Been said in a note to clients Monday. “This will keep markets wary of further strength in the U.S. dollar; especially given the scale of the recent rally and the large long position already held by the market.”

Elsewhere, traded near $68 a barrel amid concern the escalating trade rows will undercut energy demand, undermining reassurances from Saudi Arabia that it won’t flood global crude markets. Emerging-market currencies edged higher.

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