Global equity prices ticked lower yesterday as investors took stock of some disappointing US earnings reports and signs that Britain’s decision to leave the EU could hurt other economies, while the US dollar rallied to a four-month high.
Prices for US Treasury debt, considered a safe-haven asset, rose as risk appetite soured following declines in stocks. Oil prices steadied, helped by a new Libyan supply disruption.
The dollar index, which tracks the greenback against six major currencies, rose to its highest level since mid-March at to 97.126.
The US dollar rose on a combination of economic news from the US and Europe, with the euro dipping to a three-week low against the dollar of $1.0998.
Germany’s ZEW economic sentiment indicator plunged to its lowest level since late 2012 in its first reading since the Brexit vote. US data however underpinned a theme of strength in the economy, with housing starts rising more than expected in June.
Also weighing on sentiment was the International Monetary Fund’s move to cut its global growth forecasts for the next two years due to uncertainty over Britain’s looming exit from the European Union.
Investors, however, also were anxiously watching corporate results in the thick of the second-quarter earnings season. Technology and consumer discretionary stocks fell, spooked by Netflix’s weak results late on Monday.
Goldman Sachs’s results continued a market-beating streak for financials that JPMorgan kicked off last week, but its shares fell one per cent as some analysts said the profit beat was not as impressive as those of its peers.
“We’ve had some major financial earnings which have come through and now we are waiting to follow on with tech, and that’s causing a short term pause in the rally,” said Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia.
The Dow Jones industrial average rose 7.23 points, or 0.04 per cent, to 18,540.28, the S&P 500 lost 3.8 points, or 0.18 per cent, to 2,163.09 and the Nasdaq Composite dropped 11.90 points, or 0.24 per cent, to 5,043.89.
The MSCI world equity index, which tracks shares in 45 nations, was down 0.38 per cent.
Europe’s broad FTSEurofirst 300 index suffered its worst day in nearly two weeks. The index slid 0.5 pct to 1,331.27, as Swedish industrial rubber maker Trelleborg and Dutch chemicals company AkzoNobel Trelleborg and AkzoNobel fell on concerns about their outlook.
Oil prices were helped by a new Libyan supply disruption, but concerns over a global glut of crude and refined fuel capped gains.
Brent crude was up 0.9 per cent at $47 a barrel, while US crude was last down 0.46 per cent at $45.03.
In bond markets, benchmark US 10-year Treasury notes were up 7/32 in price for a yield of 1.561 per cent, down 2.6 basis points from late on Monday.
Gold cut some gains from earlier in the session hurt by the stronger dollar but was bolstered by weaker equities. Spot gold prices were up 0.18 per cent to $1,330.81 an ounce.