* BASF shares fall almost 6% after profit warning
* Dollar firm as markets look to Fed chair's testimony
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates to open of U.S. markets, changes byline, dateline;
previous LONDON)
By April Joyner
NEW YORK, July 9 (Reuters) - Stock markets around the world
broadly fell on Tuesday as trade tensions weighed on the outlook
for corporate earnings and as hopes dwindled over a hefty U.S.
interest rate cut this month.
European and U.S. equities dropped after German chemicals
giant BASF BASFn.DE warned of a 30% fall in its adjusted
annual profit, citing trade friction and a global slowdown in
growth. On Wall Street, an analyst downgrade of 3M Co MMM.N
contributed to a drop in industrial shares. 3M was the biggest
drag on the Dow Jones Industrial Average, which fell 0.32%. The
U.S. benchmark S&P 500 index .SPX , however, was little
changed, while the Nasdaq .IXIC shed losses to gain 0.22% as
tech shares edged higher.
The effect of trade tensions will be a major theme in the
U.S. corporate earnings season, set to begin later this month.
"Trade is going to be a drag on earnings, and it remains to
be seen if it's been fully reflected in (stock) valuations,"
said Chad Morganlander, senior portfolio manager at Washington
Crossing Advisors in Florham Park, New Jersey.
Yet some encouraging news on trade came on Tuesday as the
United States and China were set to relaunch talks this week
after a two-month hiatus. White House economic adviser Larry
Kudlow said talks with the European Union to move forward on a
trade agreement were also in progress. U.S. Treasury yields rose on those developments. Benchmark
10-year notes US10YT=RR last fell 5/32 in price to yield
2.0509%, from 2.034% late on Monday. Among European equities, shares of Deutsche Bank DBKGn.DE
extended their fall following news of the bank's reorganization
plans, including the elimination of 18,000 jobs worldwide. The
broad STOXX 600 .STOXX fell 0.5%.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.18%.
In the currency markets, Britain's sterling GBP= dropped
to a six-month low and was last 0.4% lower against the dollar at
$1.2459 amid a worsening economic outlook and rising fears about
a no-deal exit for Britain from the European Union. The broader focus, though, remained the potential reaction
to a weaker global outlook from the world's top central banks,
especially what U.S. Federal Reserve Chairman Jerome Powell will
say during testimony before Congress on Wednesday.
Money market futures 0#FF: are still fully pricing in a 25
basis-point cut at the Fed's July 30-31 meeting, but have almost
priced out a larger 50 bps move that had been seen as a real
possibility just a couple of weeks ago.
The dollar index .DXY , which measures the greenback
against a basket of six major currencies, rose 0.10%, while the
euro dipped 0.06% to $1.1207. "It would be pretty disruptive at this stage for Powell to
rule out a cut in July or dampen expectations of a cut in July,"
said Michael Metcalfe, head of global macro strategy at State
Street Global Markets.
Oil prices firmed after a dip in Asia as OPEC supply cuts
and Middle East tensions outweighed the U.S.-China trade dispute
that has been dragging down the global economy and oil demand.
Brent crude LCOc1 futures rose 11 cents to $64.22 a
barrel, a 0.2% gain. U.S. crude CLc1 futures rose 10 cents to
$57.76 a barrel, a 0.2% gain. Spot gold XAU= ticked 0.2% higher to $1,397.51 an ounce.
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Dot plot, Fed funds futures July 9 https://tmsnrt.rs/2YLmEzm
Euro zone government debt falls further into negative yielding
territory https://tmsnrt.rs/2YFiJUF
U.S. government debt yield curve https://tmsnrt.rs/2YHFE1M
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