Markets slide, dollar slumps as North Korea fears spike

Judith Bessette
Agosto 13, 2017

Secretary of State Rex Tillerson later insisted the US isn't signalling it's about to mete out a military response despite threats from North Korea suggesting it could attack Guam, a USA island territory in the Pacific.

But U.S. stocks regained some lost ground, despite Trump's comments Friday that U.S. weapons are "locked and loaded", ready to respond if North Korea acts "unwisely". In a note to investors, Paul Christopher, head global market strategist, and Tracie McMillion, head of global asset allocation, suggest, "the threat of a nuclear weapon is certainly more serious than previous threats, but that threat also may increase the probability of a diplomatic solution".

Japanese markets were closed for a holiday but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe was on track to post its largest weekly drop since the week before Donald Trump won the USA presidential election in November.

Wall Street put a floor under global equities on Friday after a weak inflation reading brought investors back into USA technology and other stocks, but gold and the yen still added slightly to the week's gains as tensions continued to escalate between North Korea and the United States.

A statement from the North Korean military called President Donald Trump's warning that the communist nation would face "fire and fury" if it continued its provocations a "load of nonsense".

Despite the drop, analysts said the market seemed to be a bit skeptical that the North Korea situation would grow into a major crisis, noting that the losses were still not that deep.

The Australian dollar, which rose to a 19-month high near 90.00 yen late in July, was down 0.6 per cent at 86.77 yen after slipping to a one-month low of 86.23 yen.

The last time the S&P closed down more than 1 percent was May 17 when it fell 1.8 percent.

The utilities index, often seen as a bond proxy because of its companies' slow reliable growth and high dividends, was the only S&P sector that ended the day up, showing a 0.25 percent gain.

New York Community Bancorp (NYCB) Getting Positive News Coverage, Analysis Finds
Media headlines about New York Community Bancorp (NYSE:NYCB) have trended positive this week, Accern Sentiment Analysis reports. Quantbot Technologies LP purchased a new position in New York Community Bancorp during the first quarter valued at $140,000.

Asian stocks are mostly lower as investors ponder escalating tensions over North Korea's nuclear ambitions.

In currency markets, the Canadian dollar was trading at an average price of 78.71 cents United States, down 0.20 of a USA cent. US crude (CLc1) shed 10 cents to $49.07 a barrel.

Disappointing US inflation and jobs data have not helped the dollar.

The S&P/TSX composite index was down 39.02 points to 15,217.33, with most sectors finishing in the red while bullion stocks surged almost 1.9 per cent.

The Standard & Poor's 500 index fell 7 points, or 0.3 percent, to 2,467.

Priceline Group dropped 8 percent after issuing a profit forecast that was weaker than analysts were expecting.

Markets are now awaiting USA consumer price data for July, due later in the session.

The price of crude oil dropped more than two percent Thursday, the cost of a barrel falling to $48.49.

Shares of Snap (SNAP) are also seeing pre-market weakness after the parent of Snapchat reported a wider than expected second quarter loss on revenues that came in below expectations.

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