Trump's 'fire and fury' warning hits stocks, lifts yen and gold

Judith Bessette
Agosto 13, 2017

European shares fell, following falls in Asia and on Wall Street.

The euro dipped 0.1 per cent to US$1.1737 (RM5.03) but the single European currency has been slipping this week against the dollar, having hit a more than 2 ½-year high of US$1.1892 on August 2.

Excluding food and energy prices, core consumer prices still crept up by 0.1% in July, matching the increases seen in the three previous months.

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

"The escalation of the geopolitical situation between the USA and North Korea is beginning to rattle investors' nerves as was witnessed in the VIX index yesterday", said Peter Cardillo, chief market economist at First Standard Financial.

Geopolitical tensions were at the fore, after US President Donald Trump said North Korea would be "met with fire and fury" if its threats against America continued.

"If you strip away what's going on in North Korea, and if you strip away what's going on in Washington, which are things that are tougher to predict, the economy, the global recovery, earnings, it all paints a very positive picture for the rest of the year", Kravetz said. The slide deepened after Trump's remarks on North Korea aired.

"Military solutions are now fully in place, locked and loaded, should North Korea act unwisely".

A raid on the Virginia home of President Donald Trump's former 2016 election campaign manager showed an investigation of possible ties between the campaign and Russian Federation is intensifying and focused on the financial dealings of Trump associates, sources familiar with the probe said.

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Computer hardware stocks rebounded following recent weakness, with the NYSE Arca Computer Hardware Index climbing by 1.4%.

The dollar was flat at 110.08 yen on Thursday, up from Wednesday's low of 109.56 yen, which was the dollar's lowest level since June 15.

Data storage company Seagate Technology (STX) posted a standout gain within the hardware sector, jumping by 2.4%.

Oil service stocks showed a significant move to the downside on the day, dragging the Philadelphia Oil Service Index down by 1.9 percent. The stock fell 85 cents to $12.76.

He said: "Equity markets, including Korea, have tended to react less and less to this posturing - the Korea Composite Stock Price index was only down 1% on Tuesday". Chinese blue chips closed flat but Hong Kong's Hang Seng index was last down 0.2 per cent. Japan was closed on a public holiday.

In Europe, Germany's DAX fell 1.1 percent, while France's CAC 40 slid 1.4 percent. The yield on the 10-year Treasury note held steady at 2.26 percent.

The last time the S&P 500 fell over 1 percent was on May. 17.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting, which may shed some light on the outlook for the interest rates.

Crocs (CROX), Office Depot (ODP), and Wendy's (WEN) are also among the companies due to report their results before the start of trading on Wednesday.

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