US Futures Point South as US-North Korea Rhetoric Heats Up

Tokyo stocks fall as US-North Korea tensions rise

However, bank stocks, including Goldman Sachs, Bank of America and Morgan Stanley, were down about 1 percent on the dimming prospects of another rate hike this year.

MSCI's gauge of stocks across the globe shed 0.77 percent, on track for its third straight day of declines as it pulled further back from all-time highs.

Positive sentiment was also generated by a report from the Labor Department showing just a modest uptick in consumer prices in the month of July. Its weekly gain of 2.6 percent is the largest since June 2016.

Oil prices rose nearly half a percent in today's trading following a bigger-than-expected drop in United States crude inventories.

"In the event that war should break out, and that leads to an acceptance of further loose monetary and fiscal policy in the United States, we would expect a falling U.S. dollar real yield environment, giving renewed, and sustainable, impetus to monetary metals prices".

Safe-haven demand rose after North Korea said it was "carefully examining" a plan to strike Guam, where a US military base is located, shrugging off President Donald Trump's earlier warning that further threats to the United States will be met with "fire and fury".

"I will tell you this, North Korea better get their act together or they're going to be in trouble like few nations ever have been in trouble in this world", Trump said.

The stock market jitters came as North Korea outlined plans to launch missiles aimed at the waters off the coast of the US Pacific territory of Guam.

Separately, however, US Defense Secretary Jim Mattis, who has often emphasised the devastating costs any conflict with North Korea could have, delivered a statement underscoring his boss's language.

But are investors really nervous about a possible military conflict with Kim Jong Un?

"It's unbelievable when you consider the headlines just how calm the equity markets are, how they've taken things in their stride", said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina. Germany's DAX was up 0.1%, while France's CAC 40 fell 1.1%. The index bounced off its lowest closing level in six months. Only 3 of the 30 stocks in the Dow finished the day with a gain: IBM, Coca-Cola and McDonald's.

The Dow Jones Industrial Average fell 36.64 points, or 0.17 percent, to end at 22,048.7, the S&P 500 lost 0.9 point, or 0.04 percent, to 2,474.02 and the Nasdaq Composite dropped 18.13 points, or 0.28 percent, to 6,352.33.

"When investors are optimistic to the extreme, it means that most of their money is already in the market and there's no more money coming in", Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Sarasota, Florida. South Korea's KOSPI was down 1.7 percent and Hong Kong's Hang Seng 1.8 percent.

Japanese financial markets will be closed Friday for a national holiday.

The major European also saw further downside on the day. Major U.S. indices had posted record highs in recent weeks.

In the bond market, treasuries extended the upward move seen over the two previous sessions.

Related:

Comments


Other news