Markets Right Now: Stocks drop, led by technology companies

Andrew Cummings
August 13, 2017

Ongoing tensions between North Korea and the United States weighted on stock markets once again Friday.

US DATA: The other potential driver in markets will be upcoming USA economic data, including monthly inflation figures, which could go a long way to determining expectations for the pace at which the Federal Reserve raises interest rates.

A spokesman for the Korean People's Army said in a statement it was "carefully examining" plans for a missile attack on the US Pacific territory of Guam, which has a large USA military base.

Trump issued a new tweet-warning to Pyongyang on Friday: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely".

"Given the great run we've had, seems like some sort of pullback wouldn't be surprising", said Michael Baele, managing director of investments at U.S. Bank Private Wealth Management.

Donald Trump's threat to unleash "fire and fury like the world has never seen" upon North Korea sent people seeking refuge-in the Swiss franc.

In Europe, the pan-continental STOXX 600 index lost 0.9 percent, with falls deepening after reports a vehicle had rammed a group of soldiers in Paris, injuring six.


Nasdaq 100 e-minis were down 17 points, or 0.29 percent, on volume of 36,232 contracts. The Nasdaq composite lost 36 points, or 0.6 percent, to 6,315.

The Standard & Poor's 500 index fell 35 points, or 1.4 percent, to 2,438, its biggest drop since mid-May. "Pretty remarkable, perhaps even extraordinary, considering", said Tim Ash, strategist at fund manager BlueBay.

"There aren't many players in the market, nor is there much incentive [for prices] to move right now, so I think it's going to be very quiet for the rest of the month", he commented.

The VIX rose further on Wednesday, rising as far as 12.11, its highest in nearly a month.VIX.

Global political tensions have seen investors sell off shares as they flee to less risky assets such as the yen and the Swiss franc. The dollar index, which measures the US currency against a basket of other major currencies, fell 0.14 percent.

USA producer prices Thursday disappointed, as traders await consumer price inflation figures later Friday.

"If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year", said Sireen Harajli, FX strategist at Mizuho in NY.


The Stoxx Europe 600 SXXP, -0.56% fell 0.3% to 378.56, led by losses in the industrial group.

Sterling was last trading at US$1.3007, up 0.25 per cent on the day.

"For quite some time the market hasn't really reacted to things on the Korean Peninsula because we know from the past it is largely North Korean sabre-rattling, and it may yet be".

The dollar index, which measures the US currency against a basket of major peers, slipped 0.1 per cent as US Treasury yields fell.

After touching a more than two-month high at US$1,291.86, spot gold last added 0.2 per cent to US$1,288.81 an ounce.

December gold settled up $10.80, or 0.8%, at 1,290.10/oz.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in U.S. crude inventories, leaving prices volatile.


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