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The Stoxx Europe 600 Index (SX5E) dropped 0.7 percent at 10:50 a.m. in London and Standard & Poor’s 500 Index futures lost 0.4 percent. The MSCI Asia Pacific Index (MXAP) slid 0.5 percent. The yield on 10-year Treasury notes fell four basis points to 2.32 percent. The dollar climbed to as high as 118.98 yen, the strongest since August 2007. Natural gas futures rose a second day in New York as cold weather gripped the eastern U.S. while copper declined.
Manufacturing and services in the euro area unexpectedly fell and a flash purchasing managers’ index for Chinese slid to 50, the borderline between expansion and contraction and
below economists’ estimates. U.S. inflation probably cooled in October, economists said before data, which also include reports today on initial jobless claims and existing home sales.
“The European economy is still fragile and the recovery has just run into the sand a little bit,” said William Hobbs, the London-based head of equity strategy at Barclays Plc’s wealth management unit. ‘It feels difficult to get behind industrial metals. There’s still oversupply, and it doesn’t look like demand will pick up any time soon, particularly as China slows down.’’
U.S. stocks fell from records yesterday after Federal Reserve minutes showed some policy makers were concerned prices in the economy aren’t rising fast enough. The Bank of Japan yesterday maintained record stimulus after the economy slipped into recession.
Miners Fall
Three shares fell for every one that advanced in the Stoxx 600, with commodity producers leading declines the most among 19 industry groups. BHP Billiton Ltd. (BHP), the world’s biggest miner, slipped 2.9 percent after its chief executive officer said the time for massive expansions in iron-ore production has ended. Rio Tinto Group, the second largest, lost 2.6 percent.Technip SA dropped 6.1 percent after saying it will bid 8.30 euros a share for CGG SA. The French seismic surveyor of oil and natural-gas fields surged 21 percent after rejecting the offer.
ThyssenKrupp AG rose 1.8 percent as the steelmaker resumed dividend payments after posting its first annual profit in four years. Randstad Holding NV (RAND) gained 4 percent after the recruiter said sales rose in October and predicted as much as 70 million euros ($88 million) in cost savings in the next two years.
Futures on the S&P 500 expiring in December dropped after the index yesterday slipped from a record.
Salesforce Misses
Salesforce.com Inc. lost 4.8 percent in early New York trading after forecasting fourth-quarter sales of no more than $1.441 billion and profit of 13 cents to 14 cents a share. Analysts had projected revenue of $1.45 billion and profit of 15 cents, according to the average of estimates compiled by Bloomberg.Gap Inc., Best Buy Co. and Ross Stores Inc. are among companies reporting earnings today. About 79 percent of the S&P 500 companies that have reported earnings this season have beaten analyst estimates for profit, while 60 percent exceeded sales projections, data compiled by Bloomberg show.
The MSCI Emerging Markets Index lost 0.1 percent. The Shanghai Composite and the Hang Seng China Enterprises Index of mainland shares listed in Hong Kong both were little changed.
Russia’s Micex (INDEXCF) index climbed 0.8 percent to a one-week high. OAO Uralkali rallied 6.7 percent. The world’s largest potash producer tumbled 21 percent yesterday after it halted operations and evacuated workers because of rising inflows of salty water into a mine that accounts for 3 percent of global supply. Water inflows into the mine declined in the last 24 hours, Kommersant reported, citing Gennady Tushnolobov, chairman of the Perm region’s government.
Tax Deadline
The ruble strengthened for a fourth day before a tax deadline, rising 0.3 percent. Russian companies, including exporters, who get foreign currency revenue, are due to pay as much as 110 billion rubles in value-added tax today, according to Sberbank CIB.South Korea’s won depreciated as much as 1 percent to 1,117.07 per dollar, its weakest intraday price since August 2013, amid concern the yen’s slump makes Japanese exporters more competitive. The Korean currency has weakened during 14 of the past 16 days. Only the yen has recorded a worse performance among Asian currencies tracked by Bloomberg this year.
Treasuries rose as a gauge of the bond market’s inflation outlook slid before today’s report on U.S. consumer prices.
The difference between yields on U.S. 10-year notes and similar-maturity Treasury Inflation Protected Securities narrowed to 1.83 percentage points, heading for the lowest close since October 2011. The figure is a gauge of trader’s expectations for consumer prices over the life of the debt.
Bonds Gain
European bonds also advanced, with the rate on German 10-year debt declining four basis points to 0.81 percent and that on 10-year gilts falling four basis points to 2.10 percent.The dollar rose versus most of its 16 major counterparts, with the Bloomberg Dollar Spot Index set for its highest close since 2009. The euro fell 0.4 percent to $1.2510. Australia’s dollar weakened 0.4 percent to 85.82 U.S. cents.
Natural gas gained 2.2 percent to $4.466 per million British thermal units on the New York Mercantile Exchange, adding to yesterday’s 3 percent advance. Lake-effect snow that killed six people and halted travel across western New York may reach as high as 7 feet in some areas before stopping tomorrow.
Gold for immediate delivery gained 1 percent to $1,194 an ounce. Copper fell 0.6 percent to $6,648 an metric ton in London and West Texas Intermediate oil slipped 0.3 percent to $74.38 a barrel.
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