Gold prices edge higher on raised Fed rate cut hopes
(Updates through close of U.S. trading)
By David Randall
NEW YORK, May 12 (Reuters) - World equity markets slid and
safe-haven bonds climbed on Tuesday as rising concerns about a
second wave of coronavirus infections outweighed stronger
economic data from China and upbeat corporate earnings in
Europe.
U.S. stocks dragged global equity benchmarks lower after
Anthony Fauci, the director of the National Institute of Allergy
and Infectious Diseases, told Congress the virus was not yet
under control and that there would not likely be a treatment or
vaccine in place by late August or early September Stock markets have rebounded sharply in recent weeks as the
spread of the novel coronavirus was curbed in the largest
economies of Asia and Europe, while parts of the U.S. economy
began to reopen after weeks of lockdowns.
"We have had a rally that has not been loved by everybody,"
said Hans Peterson, global head of asset allocation at SEB
Investment Management. "That rally might continue for a while
longer, but we have probably gone on to a bit of a consolidation
phase for now," he said, as investors pause to assess how
quickly the global economy can recover.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
1.31% following modest advances in Europe and slight losses in
Asia.
On Wall Street, the Dow Jones Industrial Average .DJI fell
457.21 points, or 1.89%, to 23,764.78, the S&P 500 .SPX lost
60.2 points, or 2.05%, to 2,870.12 and the Nasdaq Composite
.IXIC dropped 189.79 points, or 2.06%, to 9,002.55.
"Investors are more focused on the path ahead than the
economic damage from the wake of the COVID-19 pandemic," said
Craig W. Johnson, technical market strategist at Piper Sandler &
Co, referring to the disease caused by the new coronavirus.
"While the fundamental fallout is historic, expectations
remain low, and the fiscal and monetary policy response has been
unprecedented."
China reported its first rise in car sales in 22 months and
the removal of tariffs on some U.S imports as part of a Phase
One agreement to ease trade tensions with the United
States
In Europe, mobile operator Vodaphone beat earnings
expectations and maintained its dividend while logistics group
Deutsche Post said it saw business normalizing in Europe.
Safe-haven assets such as government bonds moved higher as
investors edged away from riskier investments. Benchmark 10-year
U.S. Treasury notes US10YT=RR last rose 15/32 in price to
yield 0.6795%, from 0.726% late on Monday.
Late on Monday, the Fed said it would start purchasing
shares of exchange-traded funds that invest in bonds, though
policymakers also downplayed the likelihood of interest rates
being cut into negative territory. Oil prices were boosted by an unexpected commitment from
Saudi Arabia to deepen production cuts in June to help drain the
supply glut caused by the coronavirus pandemic.
U.S. crude CLc1 jumped 6.88% to $25.80 per barrel and
Brent LCOc1 was at $30.03, up 1.35% on the day.
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Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
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