Equities waver on Trump agenda concerns; job data boosts dollar

Oil slips as focus shifts to Jackson Hole, Harvey

NEW YORK, Aug 24, (Agencies): A gauge of global equity markets was little changed on Thursday amid investor worries over US government funding, but the US dollar rebounded after recent weakness as central bankers convened for an annual policy summit at Jackson Hole in Wyoming.

Yields on US Treasury debt rose in light trading as investors waited on speeches scheduled for Friday by Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi.

The annual central bankers’ retreat comes amid fresh indications of global growth, with copper rising to a near three-year high on signs of stronger demand in top consumer China as inventories fell in London warehouses.

US equities fell amid concerns over President Donald Trump’s ability to usher legislation through Congress, said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.

A late-September deadline looms for US officials to raise the debt ceiling or risk defaulting on debt payments, leading investors to anticipate a volatile month, said Michael Purves, chief global strategist and head of equity derivatives research at Weeden & Co in Greenwich, Connecticut.

MSCI’s broad index of world stock markets was little changed, shedding just 0.02 percent, but the FTSEurofirst 300 index of leading regional shares in Europe closed 0.33 percent higher.

The Dow Jones Industrial Average fell 13.12 points, or 0.06 percent, to 21,798.97. The S&P 500 lost 3.69 points, or 0.15 percent, to 2,440.35 and the Nasdaq Composite dropped 19.70 points, or 0.31 percent, to 6,258.71.

The dollar rebounded, helped by better-than-expected US initial jobless claims, which rose 2,000 to a seasonally adjusted 234,000 for the week ended Aug 19.

The greenback has dropped 14 percent against the euro this year, driven by dashed expectations for tax cuts and other pro-growth plans by the Trump administration, which has weakened the case for further pro-dollar rises in US interest rates.

The dollar index rose 0.11 percent, while the euro fell 0.03 percent to $1.1802 and the Japanese yen eased 0.25 percent versus the greenback at 109.32 per dollar.

US

US stocks struggled for direction late on Thursday morning, as investors remained cautious ahead of the kickoff of the annual gathering of central bankers at Jackson Hole, Wyoming.

Speeches from Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi on Friday will be scrutinized for hints on the path of monetary policy, but neither of them are expected to give fresh guidance.

At 10:59 am ET (1449 GMT), the Dow Jones Industrial Average was up 22.33 points, or 0.1 percent, at 21,834.42 and the S&P 500 was up 1.5 points, or 0.06 percent, at 2,445.54.

The Nasdaq Composite was up 0.81 points, or 0.01 percent, at 6,279.21.

Among stocks, Dollar Tree’s 8.4 percent rise, after a strong quarterly report, gave the biggest boost to the S&P and the Nasdaq.

Signet Jewelers surged about 23 percent after the company issued its results and said it would buy an online jeweler.

While these two stocks were the top percentage gainers on the S&P, Hormel Foods and J.M. Smucker brought up the rear, falling about 7 percent each after their weak quarterly results and forecast cuts.

Even economic data on the day was a mixed bag: while the number of Americans filing for unemployment benefits rose less than expected last week, home resales unexpectedly fell in July to their lowest monthly level of the year.

Advancing issues outnumbered decliners on the NYSE by 1,658 to 1,007. On the Nasdaq, 1,709 issues rose and 929 fell.

Europe

Gains by cyclical sectors helped push European stocks higher on Thursday while heavy losses in Dixons Carphone after a profit warning dominated trading.

The pan-European STOXX 600 was up 0.2 percent at its close, in line with euro zone stocks and blue chips .

Dixons Carphone shares plummeted as much as 29 percent after the mobile phone retailer downgraded expectations for full-year profit, reflecting tougher conditions in the mobile market as customers hold on to handsets for longer.

Dixons Carphone was the worstperforming among European retail stocks so far this year, even before Thursday’s decline wiped nearly a quarter off its market value. The index was down 0.2 percent on the day as Dixons weighed.

Bank of America Merrill Lynch European equity strategist Ronan Carr said he didn’t favour Europe’s retail sector, partly because of its heavy skew towards British companies.

In general results this quarter have seen investors punish companies that missed expectations particularly harshly, a trend which analysts put down to slowing macroeconomic momentum.

Among individual stocks, shares in Danish biotech firm Genmab jumped more than 11 percent after it announced positive topline results in its phase III Alcyone trial.

British sub-prime lender Provident Financial added to a recovery from its sharp falls earlier in the week, jumping 13.2 percent.

Sunrise Communications gained 7.3 percent after its second-quarter net income more than doubled and Berenberg raised the stock to a “buy”.

Danish software firm Simcorp dropped 9.8 percent after its secondquarter results missed expectations, with order intake down 22 percent year-on-year.

“There’s a risk that the tech sector could be a little over-owned,” said Carr, pointing to tech stocks consistently being an overweight in BAML’s monthly fund manager surveys.

The company earnings season in Europe was drawing to a close, with almost 90 percent of MSCI Europe firms having reported. So far, 55 percent have beaten forecasts and 39 percent have missed.

By comparison, more than twothirds of companies reporting in the United States topped expectations.

Asia

Most Asian markets on Thursday brushed off Wall Street’s retreat, with analysts playing down Donald Trump’s government shutdown threat and the focus turning to a key central bankers’ meeting.

Asian markets were mostly in positive territory. Hong Kong ended up 0.4 percent, a third successive gain as traders returned to work after Wednesday’s typhoon.

Sydney rose 0.1 percent, Singapore was 0.4 percent higher and Seoul put on 0.4 percent, while there were also gains in Taipei.

However, Tokyo eased 0.4 percent on the back of a stronger yen, while Shanghai closed down 0.5 percent. -Key figures around 0820 GMTTokyo — Nikkei 225: DOWN 0.4 percent at 19,353.77 (close)

Hong Kong — Hang Seng: UP 0.4 percent at 27,518.60 (close)

Shanghai — Composite: DOWN 0.5 percent at 3,271.51 (close)

Dollar/yen: UP at 109.19 yen from 108.98 yen

Oil

Oil prices slipped on Thursday, giving up some recent gains as the dollar strengthened ahead of a meeting of central bankers in Jackson Hole, Wyoming, which could signal changes to monetary policy.

Benchmark Brent crude was down 25 cents a barrel at $52.32 by 1315 GMT. US light, sweet crude slipped by 45 cents to $47.96 a barrel.

The annual meeting at Jackson Hole starts on Thursday and will include speeches by US Federal Reserve Chair Janet Yellen and European Central Bank chief Mario Draghi on the outlook for monetary policy and interest rates.

Any support for the dollar from the meeting could hit oil and other assets priced in the US currency.

“Comments by Yellen and Draghi may provide volatility for the dollar, and thus dollar-denominated commodities,” said Hans van Cleef, senior energy economist at ABN AMRO in Amsterdam.

“That’s encouraging some profittaking after yesterday’s rally in crude.”

Both crude contracts rose more than 1 percent on Wednesday, buoyed by potential output disruptions from the Gulf of Mexico storm Tropical Depression Harvey.

Gold

Gold prices drifted lower on Thursday, pressured by a firmer dollar as investors awaited signals on interest rates from central bankers meeting in Jackson Hole.

Losses were limited, however, after a threat by US President Donald Trump to shut down the government unless he got unding for a border wall with Mexico.

Key to the direction of the market were funds holding huge long positions in Comex gold futures, said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Gold failed in April and June to break through the top of its broad $1,200-$1,300 range this year.

“But at the same time, there’s this threat to close down the US government by Trump if he doesn’t get his wall so that’s providing some underlying support. It’s well and truly wait and see.”

Spot gold was down 0.1 percent at $1,288.91 an ounce by 1400 GMT, after gaining 0.4 percent in the previous session.

US gold futures slipped 0.03 percent to $1,294.30 per ounce.