Stocks fall as tech struggles, commodities plunge: Markets wrap

(Bloomberg) — U.S. stocks headed for their worst day in almost two months, joining a broad decline in global equities as disappointing earnings from Chinese internet giant Tencent Holdings Ltd. roiled technology shares and copper entered a bear market, weighing on commodities. Crude briefly tumbled to below $65 a barrel after a report that American stockpiles rose the most since March 2017.

The S&P 500 Index fell for the fifth time in six sessions, while the Nasdaq 100 Index the worst performer among U.S. benchmarks. Strong retail sales figures did little to mollify investors, as Macy’s Inc. plummeted 12 percent, the most since May 2017, despite beating expectations. Tencent’s first profit decline in at least a decade rattled emerging-market equities and made

“Tech stocks are pulling the markets lower,” said Naeem Aslam, chief market analyst at TF Global Markets U.K. in London. “We are seeing investors becoming more concerned about the geopolitics.”“Tech stocks are pulling the markets lower.”

Tesla Inc. was down around 4 percent but clawed back much of the loss after a report that the U.S. Securities and Exchange Commission sent a subpoena to the electric-car maker regarding Elon Musk’s privatization plans and his comments about having secured funding.

Raw-materials producers dragged European shares down as copper and zinc sank to the lowest in more than a year. In Turkey, the lira gained after the nation’s banking regulator moved to deter short-selling in the currency. While the nation’s assets stabilized, other emerging-market currencies continued to buckle as President Recep Tayyip Erdogan intensified a diplomatic feud with his U.S. counterpart Donald Trump with a spate of new import tariffs.

With the bull market in American stocks just one week away from becoming the longest in history, investors have become increasingly cautious amid lingering trade tensions between China and the U.S. Markets have been rocked over the past week as turmoil in Turkey weighed on sentiment across many emerging- and developed-nation assets. The country announced an additional tax on imports of a broad range of American goods on Wednesday, signaling its dispute with the U.S. will continue.

“I think we have not seen the worst of it yet,” Peter Tchir, head of macro strategy at Academy Securities, said on Bloomberg Television. “You’ve only started to see a knock-on effect. I think this is truly the eye of the storm and we are going to get another round of emerging-market weakness.”

Elsewhere, Hong Kong intervened to defend its peg to the dollar for the first time in three months after the local currency fell to the weak end of its trading band. Oil fell on inventory increases and as Libya’s output climbed. Several markets, including Poland and India, were closed for a holiday.

Terminal users can read more in our Bloomberg Markets Live blog here.

Here are some key events coming up this week:

Earnings are due this week from companies including Maersk, Cisco, Walmart, and Carlsberg. Brexit talks between the EU and the U.K. resume in Brussels Thursday.

These are the main moves in markets:

Stocks

The S&P 500 was down 0.9 percent to 2,815.13 as of 1:01 p.m. in New York, its biggest decline since June, and the Nasdaq 100 dropped 1.4 percent. The Stoxx Europe 600 Index decreased 1.4 percent to the lowest in a more than a month. The MSCI All-Country World Index dipped 1.1 percent to the lowest in five weeks. The MSCI Emerging Market Index fell 1.8 percent, reaching the lowest since July 2017.

Currencies

The Bloomberg Dollar Spot Index rose 0.2 percent to the highest since June 2017. The euro was little changed at 1.1343. The Japanese yen climbed 0.4 percent to 110.71 per dollar. The Turkish lira surged 5 percent to 6.0508 per dollar. South Africa’s rand plunged 2.1 percent to 14.5406 per dollar, the weakest since September 2016. The MSCI Emerging Markets Currency Index fell 0.6 percent to the lowest since May 2017.

Bonds

The yield on 10-year Treasuries declined four basis points to 2.8569 percent, the lowest in a month. Germany’s 10-year yield slid two basis points to 0.304 percent. Britain’s 10-year yield decreased four basis point to 1.225 percent.

Commodities

The Bloomberg Commodity Index fell 1.8 percent to the lowest since July 2017. West Texas Intermediate crude slid 3 percent to $65.03 a barrel, the lowest since June. LME copper sank 4.2 percent to $5,759 per metric ton, the lowest in 13 months. Gold declined 1.4 percent to $1,176.52 an ounce, the weakest since January 2017.


(By Olivia Schaber)