Pages

Wednesday, 10 January 2018

Stocks slip from records amid concern China may stop buying US debt

  • Stocks slipped from record levels.
  • Chinese officials think U.S. debt is becoming less attractive compared to other assets, adding that trade tensions between the two countries could provide a reason to slow down or halt the purchases, according to a report.
  • U.S. stocks traded lower on Wednesday as concern grew that China may stop buying U.S. sovereign bonds.
    The Dow Jones industrial average fell 56 points and brieflty dropped more than 100 points. The S&P 500 declined 0.3 percent, with utilities and consumer staples as the worst-performing sectors. The Nasdaq composite pulled back 0.5 percent.
    Bloomberg News reported Wednesday, citing people familiar with the matter, that officials in Beijing have recommended the Chinese government lowers — or even stops — its buying of U.S. sovereign debt.
    The report also notes that Chinese officials think U.S. debt is becoming less attractive compared to other assets, adding that trade tensions between the two countries could provide a reason to slow down or halt the purchases.A trader on the floor of the New York Stock Exchange.
  • A trader on the floor of the New York Stock 
  • Exchange.Daniel Deming, managing director at KKM Financial, said the report rattled financial markets. "We're now seeing rates go to levels the market hasn't had to contend with in a long time," he said. "The rate environment is changing dramatically. Now the market has to price that in. That's why you're seeing this pressure."
  • Stocks posted record highs in the previous session, continuing their stellar start to 2018. Thus far, the Dow, S&P 500 and Nasdaq are up 2.7 percent, 2.9 percent and 3.8 percent, respectively, for the year.
    "When you start off the year the way we did, it's usually because of asset allocation decisions made in December," chairman and CEO of Marketfield Asset Management. "Now the market needs to recharge its batteries. This pattern is normal."
    Gold futures were higher by 0.4 percent at $1,318.30 per ounce, while the U.S. dollar dropped 0.4 percent against a basket of currencies.
    In corporate news, Eastman Kodak shares surged 60 percent after the company said it has used blockchain — the underlying technology for popular cryptocurrencies like bitcoin — to create a digital photography platform called KodakCoin.
    Signet Jewelers was the worst-performing stock in the S&P 500, falling 6 percent after its holiday same-store sales fell short of estimates.

No comments:

Post a Comment