Markets

Markets extend losses as Korea tensions escalate

Markets extend losses as Korea tensions escalate

Buying interest may be somewhat subdued, however, as the ever-escalating war of words between President Donald Trump and North Korea continues to raise geopolitical concerns. "You're less than 2 per cent off the high for the S&P heading into a weekend where uncertainty with North Korea still lingers".

USA equity traders grown accustomed to docile markets were shaken awake as tension over North Korea escalated, sending the S&P 500 to the largest weekly drop since March.

Five of the 11 major S&P sectors were higher, with the technology's 0.80 percent rise leading the advancers.

Reflecting a drop in prices for services, the Labor Department released a report on Thursday showing an unexpected decrease in USA producer prices in the month of July.

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.

Japanese markets were closed for a holiday, but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe posted its largest weekly drop since the week before Donald Trump won the United States presidential election in November.

Japan markets are closed for the Mountain Day holiday.

We should also be aware of the risk of responding to geo-political shocks by selling assets: too often we find ourselves selling at the moment of highest fear, only to be out of the market as a rebound in stock market prices takes place as tensions wind down.




France's CAC.FCHI dropped 1.8 percent and Germany's DAX.GDAXI fell 1.5 percent.

The dollar widened losses against the yen to hit a two-month low.

Gartman's comments follow Bridgewater Associates founder Ray Dalio's gold recommendation: "We can also say that if the above things go badly, it would seem that gold (more than other safe haven assets like the dollar, yen, and treasuries) would benefit", Dalio wrote in a LinkedIn blog post.

Away from the geopolitical drama, USA inflation data is due at 1330 GMT.

For now, the dollar remains on the back foot, pulling back 0.1% to 0.9635 Swiss francs today, after dropping as much as 1.2% to a two-week low overnight.

London's FTSE 100 dipped by about 90 points, or more than 1%, in morning trading on Friday, adding to a slump of more than 100 points the day before and taking it to its lowest level since May. The 30-year bond last rose 28/32 in price to yield 2.7759 percent, from 2.818 percent late on Wednesday. Benchmark 10-year notes were last up 12/32 in price to yield 2.201 percent, from 2.242 percent late on Wednesday.

In commodities trading, crude oil futures are slipping USD0.10 to USD48.49 a barrel after tumbling USD0.97 to USD48.59 a barrel on Thursday.


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