U.S. stocks fall again on North Korea tensions

Judith Bessette
Agosto 13, 2017

The S&P 500 index had its biggest one-day drop in nearly three months on Thursday as investors fled riskier assets, with technology stocks leading the charge, in response to an increasingly aggressive exchange of threats between the United States and North Korea.

If the North Korean regime "does anything" to the USA or a USA ally "things will happen to them like they never thought possible", Trump told reporters on Thursday, according to Bloomberg.

Tokyo's Nikkei 225 tumbled 1.3 percent to 19,737.59 points and Seoul's Kospi fell 0.7 percent to 2,378.56.

Oil prices are holding their own ahead of the U.S open after yesterday's weekly API inventory reported a large drop in U.S crude stocks countered balanced industry doubts that compliance with OPEC-led supply cuts will increase.

U.S. stocks joined the downward trend after investors were left rattled by President Donald Trump's "fire and fury" warning to North Korea.

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

The Japanese yen hit an eight-week high against the USA dollar, and US -traded Nikkei stock futures dropped 2 percent to their lowest since mid May.

"The escalation of the geopolitical situation between the US 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.

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The greenback slipped 0.83 per cent to a near two-week low against the Swiss franc and fell to 110.11 yen, its lowest in almost two months against the Japanese currency. The market is concerned that North Korea could strike before any preemptive attack by the U.S.

The dollar came under immediate pressure and gold moved to fresh 2-month highs just above $1,290 per ounce. On August 9, it rose 1.4% to 11.11. Sydney's S&P-ASX 200 gained 0.5 percent to 5,773.70 while Manila, Malaysia and Jakarta also rose. Hong Kong's Hang Seng index was down 553 points or 2.02 percent at 26,887 in late trade. "What's happened in North Korea is enough to do that".

While the German DAX Index has edged down by 0.1%, the French CAC 40 Index and the UK's FTSE 100 Index are both down by 1%.

French consumer prices climbed 0.7% year-on-year in July, the same rate as seen in June and in line with the preliminary estimate.

Shares of Blue Apron Holdings fell 17% after it said it lost more money than analysts had expected in its first quarterly earnings report since going public in June.

In economic news, second-quarter Singapore GDP growth was revised upwards to 2.2 percent compared to the previous quarter, above an earlier estimate of 0.4 percent growth.

Until then, lack of supply should make it hard for gilt yields to rise and this should also help gilts out-perform U.S treasuries in the near term.

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