Wall Street losses rip through global markets as rate fears shake investors

Global markets plunged Thursday, continuing steep losses seen in the previous session, as investors worry about rapidly rising interest rates and an expected slowdown in global growth. Overnight Dow Jones industrial average futures were down by 189 points as of 2:52 a.m. This after stocks sank Wednesday with the Dow plunging more than 800 points in its worst drop since February. Around the world, stocks have tumbled on the back of concerns surrounding global economic growth and rising interest r


Global markets plunged Thursday, continuing steep losses seen in the previous session, as investors worry about rapidly rising interest rates and an expected slowdown in global growth. Overnight Dow Jones industrial average futures were down by 189 points as of 2:52 a.m. This after stocks sank Wednesday with the Dow plunging more than 800 points in its worst drop since February. Around the world, stocks have tumbled on the back of concerns surrounding global economic growth and rising interest r
Wall Street losses rip through global markets as rate fears shake investors Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: fred imbert, eustance huang, ryan browne, matt clinch, getty images
Keywords: news, cnbc, companies, seen, investors, points, street, wall, dow, yields, trump, stocks, week, rates, rate, global, losses, markets, rip, shake, fears


Wall Street losses rip through global markets as rate fears shake investors

Global markets plunged Thursday, continuing steep losses seen in the previous session, as investors worry about rapidly rising interest rates and an expected slowdown in global growth.

Overnight Dow Jones industrial average futures were down by 189 points as of 2:52 a.m. ET. Futures implied the Dow will open Thursday down by 280 points. This after stocks sank Wednesday with the Dow plunging more than 800 points in its worst drop since February. The VIX (the CBOE Volatility Index), which is seen as a fear gauge for the market, also hit a high of 20.58, its highest level since April 11.

Around the world, stocks have tumbled on the back of concerns surrounding global economic growth and rising interest rates. The International Monetary Fund warned earlier this week that simmering trade tensions, such as those between the U.S. and China, could lead to a “sudden deterioration in risk sentiment, triggering a broad-based correction in global capital markets and a sharp tightening of global financial conditions.”

Meanwhile, U.S. Treasury yields have this week climbed to multi-year highs. Traditionally a sharp rise in bond yields — the cost of borrowing — is seen as negative for major cooperates and their stock prices. President Donald Trump on Wednesday once again criticized the U.S. Federal Reserve, calling the central bank “crazy” for its insistence on hiking rates. Trump also commented on the plunge in markets, calling it a “correction that we’ve been waiting for for a long time.”


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: fred imbert, eustance huang, ryan browne, matt clinch, getty images
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Bond yields sink after consumer prices reading is lighter than expected, quelling inflation fears

That could be a worry for the Federal Reserve trying to keep a lid on inflation. Though consumer prices came in softer than expected, the print is unlikely to impact market expectations for a fourth rate hike from the Federal Reserve before the end of the year. Markets have been jittery as interest rates continue to climb. Concerns surrounding rising interest rates continue to keep investors on edge, as strong economic data fuel jitters on what this could mean for the future of U.S. monetary pol


That could be a worry for the Federal Reserve trying to keep a lid on inflation. Though consumer prices came in softer than expected, the print is unlikely to impact market expectations for a fourth rate hike from the Federal Reserve before the end of the year. Markets have been jittery as interest rates continue to climb. Concerns surrounding rising interest rates continue to keep investors on edge, as strong economic data fuel jitters on what this could mean for the future of U.S. monetary pol
Bond yields sink after consumer prices reading is lighter than expected, quelling inflation fears Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: thomas franck
Keywords: news, cnbc, companies, reserve, inflation, interest, continue, quelling, consumer, sink, treasury, yields, lighter, hike, expected, rates, prices, fears, market, federal, reading, neutral, fed


Bond yields sink after consumer prices reading is lighter than expected, quelling inflation fears

Recent employment reports have added to the now-widespread view that the labor market is near or beyond full employment and have started to show acceleration in wage growth. That could be a worry for the Federal Reserve trying to keep a lid on inflation.

Though consumer prices came in softer than expected, the print is unlikely to impact market expectations for a fourth rate hike from the Federal Reserve before the end of the year.

“CPI was a miss, but it doesn’t necessarily portend broader inflation trends,” said George Goncalves, head of fixed-income strategy at Nomura Securities International. “As the Fed is watching this information come in over the months, you get mixed reads, so this does not stop them. They’re making their way to their neutral rate.”

As of 9:26 a.m. ET, expectations for a hike at its December meeting held around 78 percent, according to the CME Group’s FedWatch tool.

Equity markets around the world slumped Thursday. Asia-Pacific stocks saw sharp declines by the region’s market close, while European shares tumbled in its morning trade. In the U.S., futures tanked following on from a sharp drop seen in the previous session where the Dow closed more than 800 points down.

Markets have been jittery as interest rates continue to climb. While Treasury yields inched lower on Wednesday, this comes after the benchmark 10-year Treasury yield clinched a fresh seven-year high and the 30-year bond yield reached a high not seen since 2014 during the course of Tuesday’s trade.

Concerns surrounding rising interest rates continue to keep investors on edge, as strong economic data fuel jitters on what this could mean for the future of U.S. monetary policy and therefore the economy.

On the auction front, the U.S. Treasury is set to auction $15 billion in 29-year and 10 month bonds.

Following the central bank’s move to hike rates a third time this year, Fed Chair Jerome Powell said in an interview with PBS that U.S. monetary policy is “far from neutral,” suggesting front-end rates have further room to rise.

“Interest rates are still accommodative, but we’re gradually moving to a place where they will be neutral,” Powell said added. “We may go past neutral, but we’re a long way from neutral at this point, probably.”

In the latest surrounding the topic, President Donald Trump criticized the Federal Reserve on Wednesday, saying that the U.S. central bank was “making a mistake” for continuing to increase interest rates.

“The problem [causing the market drop] in my opinion is Treasury and the Fed. The Fed is going loco and there’s no reason for them to do it. I’m not happy about it,” Trump went on to say in a separate telephone interview with Fox host Shannon Bream.

“Loco” means “crazy” in Spanish.

“The loco part: that was a new one,” Nomura’s Goncalves added. “I don’t place much value in it; the Fed will continue to do what’s necessary to keep in the economy from overheating. They’re just trying to get the frothiness out.”

“If they don’t lean against it, it can be much worse later on.”

— CNBC’s Alexandra Gibbs contributed reporting.


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: thomas franck
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ECB’s rising growth fears not enough to derail policy: minutes

Global trade tensions could slow euro zone growth further and European Central Bank policymakers debated last month whether to downgrade their risk assessment, minutes of their September meeting showed on Thursday. Indeed, even as trade tensions weighed on growth and a stock market selloff amplified growth fears, some policymakers argued that was not enough for the bank to backtrack on policy normalization. “A gradual pace of monetary policy normalisation is justified,” Finnish central bank chie


Global trade tensions could slow euro zone growth further and European Central Bank policymakers debated last month whether to downgrade their risk assessment, minutes of their September meeting showed on Thursday. Indeed, even as trade tensions weighed on growth and a stock market selloff amplified growth fears, some policymakers argued that was not enough for the bank to backtrack on policy normalization. “A gradual pace of monetary policy normalisation is justified,” Finnish central bank chie
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Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: krisztian bocsi, bloomberg, getty images
Keywords: news, cnbc, companies, growth, fears, derail, policymakers, rising, ecb, bank, minutes, argued, month, policy, ecbs, meeting, inflation


ECB's rising growth fears not enough to derail policy: minutes

Global trade tensions could slow euro zone growth further and European Central Bank policymakers debated last month whether to downgrade their risk assessment, minutes of their September meeting showed on Thursday.

But policymakers ultimately concluded that the domestic economy was showing enough resilience to consider risks broadly balanced, even if some argued that the factors behind the recent slowdown may not be temporary as earlier thought, the ECB said in the accounts of the Sept 13 meeting.

The ECB kept policy unchanged as expected last month, staying on track to wrap up a 2.6 trillion-euro ($3 trillion) bond purchases scheme this year and raise interest rates next autumn, continuing its slow but steady pace of policy tightening.

Indeed, even as trade tensions weighed on growth and a stock market selloff amplified growth fears, some policymakers argued that was not enough for the bank to backtrack on policy normalization.

“A gradual pace of monetary policy normalisation is justified,” Finnish central bank chief Olli Rehn said in Indonesia on Thursday. “The current strength of the euro area economy supports our confidence that inflation will converge towards … the ECB’s price stability target.”

But some policymakers appear to be increasingly cautions, according to the minutes.

“A remark was made that some of the factors behind the (downward growth) revisions might not be entirely of a transitory nature,” the minutes showed. “It was also argued that there could be larger spillovers from weaker external demand to domestic demand.”

Still, while some policymakers argued that the case could be made for downgrading the risk assessment, there was agreement that the underlying strength of the economy would mitigate the downside risks to activity.

“High-frequency indicators had stabilised and remained at elevated levels, underlining the overall robustness of economic activity,” chief economist Peter Praet told policymakers at the meeting, the minutes showed.

With years of unprecedented stimulus finally lifting inflation, the ECB has been dialling back support, but only by the smallest of increments, fearing that bigger moves risked unravelling its work.

While the ECB has not explicitly pledged any rate hikes, policymakers, including Praet, have argued that they were comfortable with market expectation for a small increase in the fourth quarter of 2019, followed by only small and infrequent moves.

“To be any more precise than that, to lock in a date, to tie our hands, would be rather risky,” Ardo Hansson, Estonia’s central bank chief said at the annual meeting of the International Monetary Fund on Thursday.

“When we get closer, we can have another discussion if we need to adjust the language again, but this is not a debate we are going to have just yet,” Hansson said.

Policymakers also concluded last month that domestic cost pressures continued to build and broaden, indicating that inflation would rise, moving back towards the bank’s target of almost 2 percent after undershooting it for over five years.


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: krisztian bocsi, bloomberg, getty images
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Chip stocks are getting massacred in October — including AMD — on rising rates, downturn fears

Chip stocks are plunging this month as investors react to surging interest rates and concerns over weakening business trends in the semiconductor industry. The iShares PHLX Semiconductor ETF has declined nearly 5 percent this month through Tuesday versus a 1 percent fall for the S&P 500. The chip sector ETF closed down another 4.4 percent Wednesday. Several chip stocks are down much more than the sector. Earlier this week, Raymond James reduced its 2019 earnings estimates for eight chip stocks,


Chip stocks are plunging this month as investors react to surging interest rates and concerns over weakening business trends in the semiconductor industry. The iShares PHLX Semiconductor ETF has declined nearly 5 percent this month through Tuesday versus a 1 percent fall for the S&P 500. The chip sector ETF closed down another 4.4 percent Wednesday. Several chip stocks are down much more than the sector. Earlier this week, Raymond James reduced its 2019 earnings estimates for eight chip stocks,
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Chip stocks are getting massacred in October — including AMD — on rising rates, downturn fears

Chip stocks are plunging this month as investors react to surging interest rates and concerns over weakening business trends in the semiconductor industry.

The iShares PHLX Semiconductor ETF has declined nearly 5 percent this month through Tuesday versus a 1 percent fall for the S&P 500. The chip sector ETF closed down another 4.4 percent Wednesday.

Several chip stocks are down much more than the sector. Shares of AMD are down about 17 percent month to date, while Nvidia’s stock is down nearly 10 percent.

Earlier this week, Raymond James reduced its 2019 earnings estimates for eight chip stocks, predicting companies will announce weakness in business activity. After spending a week in Asia talking to chip supply chain companies, the firm also downgraded several semiconductor stocks in late September, saying the sector has entered a “cyclical downturn.”


Company: cnbc, Activity: cnbc, Date: 2018-10-10  Authors: tae kim, norbert millauer, afp, getty images
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Europe stocks close sharply lower as luxury, tech and mining firms lead the losses; LVMH down 7%

The pan-European Stoxx 600 closed provisionally down by 1.46 percent. Tech and basic resources were the two biggest losers on aggregate, but most sectors struggled amid fears over global economic growth and rising interest rates. The FTSE 100 in London closed lower by around 1 percent while Germany and France’s main markets both shed around 2 percent in overall value. Looking at individual companies, shares of luxury firms filled the bottom of the Stoxx 600 Wednesday. Other luxury brands were al


The pan-European Stoxx 600 closed provisionally down by 1.46 percent. Tech and basic resources were the two biggest losers on aggregate, but most sectors struggled amid fears over global economic growth and rising interest rates. The FTSE 100 in London closed lower by around 1 percent while Germany and France’s main markets both shed around 2 percent in overall value. Looking at individual companies, shares of luxury firms filled the bottom of the Stoxx 600 Wednesday. Other luxury brands were al
Europe stocks close sharply lower as luxury, tech and mining firms lead the losses; LVMH down 7% Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-10  Authors: david reid, silvia amaro, ryan browne
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Europe stocks close sharply lower as luxury, tech and mining firms lead the losses; LVMH down 7%

The pan-European Stoxx 600 closed provisionally down by 1.46 percent. Tech and basic resources were the two biggest losers on aggregate, but most sectors struggled amid fears over global economic growth and rising interest rates.

Investor sentiment has taken a hit this week after an IMF report lowered its global gross domestic product forecast for both this year and next. In the United States, fears that the Federal Reserve is ready to push the cost of borrowing higher has also had a knock-on effect to global markets.

The FTSE 100 in London closed lower by around 1 percent while Germany and France’s main markets both shed around 2 percent in overall value.

Looking at individual companies, shares of luxury firms filled the bottom of the Stoxx 600 Wednesday. LVMH ended down by 7.14 percent after reporting a slowdown in sales. Other luxury brands were also below the flatine, with Moncler off by 10.85 percent and Kering down by 9.62 percent. According to Reuters, Morgan Stanley cut its EU luxury goods sector rating to “underweight.”

Wirecard sat at the bottom of Europe’s main index after slipping more 14.2 percent. The German tech firm giving up all and more of Tuesday’s strong gains.


Company: cnbc, Activity: cnbc, Date: 2018-10-10  Authors: david reid, silvia amaro, ryan browne
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Dow drops 200 points, heads for 3-day losing streak amid fears of rising rates

Data released last week also showed the U.S. services sector expanded at its fastest pace on record last month. Federal Reserve Chairman Jerome Powell also said last week monetary policy is “a long way” from neutral, signaling more rate hikes are coming. The Fed has already raised rates three times this year and is forecast to hike once more before year end. “While the 10-year Treasury yield is rising it is still well below nominal GDP growth,” they said. “In fact, Fed tightening and the rise in


Data released last week also showed the U.S. services sector expanded at its fastest pace on record last month. Federal Reserve Chairman Jerome Powell also said last week monetary policy is “a long way” from neutral, signaling more rate hikes are coming. The Fed has already raised rates three times this year and is forecast to hike once more before year end. “While the 10-year Treasury yield is rising it is still well below nominal GDP growth,” they said. “In fact, Fed tightening and the rise in
Dow drops 200 points, heads for 3-day losing streak amid fears of rising rates Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-08  Authors: fred imbert, alexandra gibbs, michael nagle, bloomberg, getty images
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Dow drops 200 points, heads for 3-day losing streak amid fears of rising rates

On Friday, the U.S. government said the unemployment rate in the U.S. fell last month to a level not seen in close to 50 years. Overall jobs creation disappointed for last month, but that was offset by sharp upward revisions for the number of jobs created in August and July. Data released last week also showed the U.S. services sector expanded at its fastest pace on record last month.

Federal Reserve Chairman Jerome Powell also said last week monetary policy is “a long way” from neutral, signaling more rate hikes are coming. The Fed has already raised rates three times this year and is forecast to hike once more before year end.

“Interest rate risks remain clearly to the upside,” strategist at MRB Partners said in a note. “The Fed remains on a gradual tightening path, but pressure to accelerate will likely escalate.”

“While the 10-year Treasury yield is rising it is still well below nominal GDP growth,” they said. “In fact, Fed tightening and the rise in the 10-year yield over the past year have been less than the acceleration in economic growth, such that monetary conditions have actually eased.”

U.S. Treasurys did not trade on Monday as the bond market remained closed for Columbus day.

The sharp rise in rates sent stocks tumbling last week. The S&P 500 posted its worst weekly performance since the week of Sept. 7, while the Nasdaq had its biggest one-week fall since March. The Dow also posted its second straight weekly decline.

The latest corporate earnings season kicks off this week with major banks like Citigroup, J.P. Morgan Chase and Wells Fargo all scheduled to release their latest quarterly results.

S&P 500 earnings are expected to have grown by 19.2 percent in the third quarter, according to FactSet data. Corporate profits grew by more than 20 percent in the first two quarters of the year.

Stocks also fell Monday after a decline in overseas markets.

Chinese stocks saw declines after the People’s Bank of China (PBOC) announced measures on Sunday to cut the amount of cash that banks have to hold as reserves, with the reserve requirement ratios set to be slashed by 100 basis points, effective from next week. The news comes as the nation continues to battle with the U.S. over a tit-for-tat trade war, and is the fourth time the PBOC has slashed its reserve requirement ratio (RRR) in 2018.

The Shanghai Composite fell 3.7 percent overnight while Korean Kospi index pulled back 0.6 percent. In Europe, the Stoxx 600 index dropped 1.1 percent.


Company: cnbc, Activity: cnbc, Date: 2018-10-08  Authors: fred imbert, alexandra gibbs, michael nagle, bloomberg, getty images
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Global dealmaking appetite falls to a four-year low amid Brexit, US-China trade fears, study says

Companies’ appetite for mergers and acquisitions has fallen to a four-year low, with investment pressured by worries over Brexit and the U.S.-China trade battle, according to a study released on Monday. Less than half — 46 percent — of global executives plan to buy other firms in the next 12 months, a 10 percent decline from the previous year, EY said in its biannual “Global Capital Confidence Barometer” report. The consultancy said that 46 percent of respondents to a survey of more than 2,600 e


Companies’ appetite for mergers and acquisitions has fallen to a four-year low, with investment pressured by worries over Brexit and the U.S.-China trade battle, according to a study released on Monday. Less than half — 46 percent — of global executives plan to buy other firms in the next 12 months, a 10 percent decline from the previous year, EY said in its biannual “Global Capital Confidence Barometer” report. The consultancy said that 46 percent of respondents to a survey of more than 2,600 e
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Keywords: news, cnbc, companies, global, brexit, study, low, fears, dealmaking, vice, yeargeopolitical, trade, falls, fouryear, weaker, undeniable, 46, executives, worries, uschina


Global dealmaking appetite falls to a four-year low amid Brexit, US-China trade fears, study says

Companies’ appetite for mergers and acquisitions has fallen to a four-year low, with investment pressured by worries over Brexit and the U.S.-China trade battle, according to a study released on Monday.

Less than half — 46 percent — of global executives plan to buy other firms in the next 12 months, a 10 percent decline from the previous year, EY said in its biannual “Global Capital Confidence Barometer” report.

The consultancy said that 46 percent of respondents to a survey of more than 2,600 executives across 45 countries also said they saw regulation and geopolitical uncertainty as the biggest risk to dealmaking activity over the next year.

“Geopolitical, trade and tariff uncertainties have finally caused some dealmakers to hit the pause button,” Steve Krouskos, global vice chair of EY’s transaction advisory services team, said in a statement.

“Despite stronger-than-anticipated first-half earnings and the undeniable strategic imperative for deals, we can expect this year to finish with much weaker M&A than how it started.”


Company: cnbc, Activity: cnbc, Date: 2018-10-08  Authors: ryan browne, thomas peter-pool, getty images news, getty images
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Dow falls the most in 2 months on fears of rising rates as 10-year yield hits highest since 2011

The Dow Jones Industrial Average dropped 200.91 points to 26,627.48 as Nike and Home Depot lagged. The 30-stock index dropped 356 points at its lows of the day and posted its worst decline since Aug. 10. The S&P 500 declined 0.8 percent to 2,901.61, notching its worst day since June 25, with communications and tech sectors both sliding more than 1.5 percent. The benchmark 10-year Treasury note yield reached its highest level since 2011, breaking above 3.2 percent. “The level of the rates does no


The Dow Jones Industrial Average dropped 200.91 points to 26,627.48 as Nike and Home Depot lagged. The 30-stock index dropped 356 points at its lows of the day and posted its worst decline since Aug. 10. The S&P 500 declined 0.8 percent to 2,901.61, notching its worst day since June 25, with communications and tech sectors both sliding more than 1.5 percent. The benchmark 10-year Treasury note yield reached its highest level since 2011, breaking above 3.2 percent. “The level of the rates does no
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Dow falls the most in 2 months on fears of rising rates as 10-year yield hits highest since 2011

Here’s what four experts say to do next following Thursday’s selloff 12 Hours Ago | 03:14

Stocks fell sharply on Thursday as interest rates hit new multiyear highs, dampening investor sentiment.

The Dow Jones Industrial Average dropped 200.91 points to 26,627.48 as Nike and Home Depot lagged. The 30-stock index dropped 356 points at its lows of the day and posted its worst decline since Aug. 10.

The S&P 500 declined 0.8 percent to 2,901.61, notching its worst day since June 25, with communications and tech sectors both sliding more than 1.5 percent. The Nasdaq Composite dropped 1.8 percent — its biggest daily drop since June 25 — to 7,879.51 as Facebook, Netflix and Alphabet all dropped more than 2 percent.

The benchmark 10-year Treasury note yield reached its highest level since 2011, breaking above 3.2 percent.

“The level of the rates does not concern us,” said Steve Chiavarone, portfolio manager at Federated Investors. “That said, moving more than 10 basis points in two days is a different story. Pace matters and it bears watching.”


Company: cnbc, Activity: cnbc, Date: 2018-10-04  Authors: fred imbert, alexandra gibbs, michael nagle, bloomberg, getty images
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Gold prices rise on softer dollar, Italy budget woes

Gold prices touched a one-week high on Wednesday as the dollar softened and demand for the safe-haven metal got a boost on concerns surrounding Italy’s plans to tackle budgetary deficit. However, the debt fears were tempered on reports that Italy will cut its budget deficit at a faster pace than expected. “Gold has jumped a little bit on populist sentiments from euro zone, Italy deficit concerns, and fall in equities,” said Benjamin Lu, commodities analyst, Phillip Futures. Gold prices are still


Gold prices touched a one-week high on Wednesday as the dollar softened and demand for the safe-haven metal got a boost on concerns surrounding Italy’s plans to tackle budgetary deficit. However, the debt fears were tempered on reports that Italy will cut its budget deficit at a faster pace than expected. “Gold has jumped a little bit on populist sentiments from euro zone, Italy deficit concerns, and fall in equities,” said Benjamin Lu, commodities analyst, Phillip Futures. Gold prices are still
Gold prices rise on softer dollar, Italy budget woes Cached Page below :
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Gold prices rise on softer dollar, Italy budget woes

Gold prices touched a one-week high on Wednesday as the dollar softened and demand for the safe-haven metal got a boost on concerns surrounding Italy’s plans to tackle budgetary deficit.

Risk appetite was hit after European Union (EU) officials expressed concerns about Italy’s budget plan, which would widen the deficit significantly. The deficit blowout revived fears of the eurozone debt crisis.

However, the debt fears were tempered on reports that Italy will cut its budget deficit at a faster pace than expected.

Spot gold was up 0.2 percent at $1,205.66, as of 0505 GMT. Earlier in the session, the bullion touched a one-week high of $1208.31. It gained 1.3 percent on Tuesday in its biggest one-day percentage gain since Aug. 24.

U.S. gold futures climbed 0.2 percent to $1,209.50 an ounce.

“Gold has jumped a little bit on populist sentiments from euro zone, Italy deficit concerns, and fall in equities,” said Benjamin Lu, commodities analyst, Phillip Futures.

“Overall, our assessment is it’s a knee-jerk reaction. We are seeing a little bit of selling and buying activities supported by equity markets … But it’s still a dollar story. Gold prices are still very susceptible to the dollar.”

The dollar index against a basket of six major currencies was down 0.2 percent.

Gold prices dropped for the past six months, losing over 11 percent, largely due to dollar strength, with the U.S. currency benefiting from a vibrant U.S. economy, rising U.S. interest rates and fears of a global trade war.

“Shorts are nervous of uncertainty around Italy at least and that may well continue with gold above $1,204-$1,206. It may appear that with this new stress the big shorts are more on the defensive,” said Nicholas Frappell, global general manager, ABC Bullion, Australia.

“I expect with gold above $1,200, that $1,213 is the next target, at the top of the Daily Ichimoku cloud, which should prove resistive.”

Gold is used as an alternative investment during times of political and financial uncertainty.

“Going forward, gold prices are subject to the U.S. dollar and how fast Italy’s concerns will be removed or reduced,” said Argonaut Securities analyst Helen Lau.

Meanwhile, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.32 percent to 23,721,571.86 ounces on Tuesday.

Among other precious metals, silver rose 0.7 percent to $14.74 an ounce, hovering close to previous session’s $14.90, its highest in more than a month.

Platinum climbed 0.5 percent to $830.80 per ounce and palladium gained 0.2 percent at $1,053.65.


Company: cnbc, Activity: cnbc, Date: 2018-10-03
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Forget the trade wars and fears of a market slump — commodities are back

Doctor Copper is at it again, signaling upside for mining stocks, according to some analysts. But, perhaps the mood music is changing for mining stocks. There is a strong correlation between copper prices and mining stocks, according to Sebastian Raedler, head of European equity strategy at Deutsche Bank. “The continued noise around trade wars, China versus the U.S., is holding investors back. So are mining stocks at this point only for the brave?


Doctor Copper is at it again, signaling upside for mining stocks, according to some analysts. But, perhaps the mood music is changing for mining stocks. There is a strong correlation between copper prices and mining stocks, according to Sebastian Raedler, head of European equity strategy at Deutsche Bank. “The continued noise around trade wars, China versus the U.S., is holding investors back. So are mining stocks at this point only for the brave?
Forget the trade wars and fears of a market slump — commodities are back Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-02  Authors: karen tso, kham
Keywords: news, cnbc, companies, wars, forget, commodities, stocks, european, copper, raedler, prices, trade, china, investors, remain, market, mining, fears, slump


Forget the trade wars and fears of a market slump — commodities are back

Doctor Copper is at it again, signaling upside for mining stocks, according to some analysts. This, despite it being largely overlooked by investors, and even feared by others stewing over the implications of the trade spat between the U.S. and China.

The Basic Resources sector in Europe is trading lower than its starting point for 2018 and is well off the highs registered in May and June. Red ink in European equities is nothing new — many sectors and stock market indices remain negative year-to-date, as investors focus on the divergence trade with the U.S. outperforming everything else.

But, perhaps the mood music is changing for mining stocks.

There is a strong correlation between copper prices and mining stocks, according to Sebastian Raedler, head of European equity strategy at Deutsche Bank. Raedler expects copper prices to rally from here and for there to be a 10 percent increase for the mining sector by early December. The upside could be amplified to a 16-percent rally if adjusted for currency expectations, he said.

Deutsche Bank anticipates sterling will remain flat versus the dollar in coming months. Further number crunching by Raedler indicates the 12-month forward price-to-earnings ratio of European miners is at a 25 percent discount to the broader market, highlighting deep value in the sector.

Value or bear trap remains the question as many fear a trade war will stop European miners and other cyclical stocks in their tracks.

There are two opposing forces — the concern about trade and what is happening to the cyclical environment, Willem De Vijlder, group chief economist at BNP Paribas told CNBC recently. But he warned not to ignore the impact of China stimulus.

“China has made a shift in its policy stance, which I guess is the reason why metal prices have jumped. As soon as there is some silence on the airwaves around trade, then there could be an uplift coming on the view that the cycle is not bad and the China stimulus is there,” he said.

Others think buying mining stocks is premature and remain on the sidelines. Talib Sheikh, head of strategy, multi-asset at Jupiter Asset Management, has historically had mining stocks on the radar because of free cash flows, but warned that now is not the time to scoop up these assets.

“The continued noise around trade wars, China versus the U.S., is holding investors back. It’s not entirely clear how that pans out — the idea that we’re going to see a resolution in October or November looks unlikely, so a protracted battle means again as we look into 2019… the growth trajectory looks uncertain, so that growth would need to be upgraded more meaningfully to get involved,” Sheikh told CNBC.

So are mining stocks at this point only for the brave? Absolutely.

Karen Tso is an anchor on Squawk Box Europe, CNBC and you can follow her on Twitter @cnbckaren.


Company: cnbc, Activity: cnbc, Date: 2018-10-02  Authors: karen tso, kham
Keywords: news, cnbc, companies, wars, forget, commodities, stocks, european, copper, raedler, prices, trade, china, investors, remain, market, mining, fears, slump


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