Bullish indicating open at $55-$60, IPO prices at $37
(Adds details from Trump statement, gold and oil settlement
prices)
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* U.S. to no longer recognize Hong Kong as autonomous
* U.S. stocks reverse loses
* MSCI All Country World Index down 0.2%
By John McCrank and Herbert Lash
NEW YORK, May 29 (Reuters) - Global stocks fell while bonds
and the euro climbed on Friday as investors turned cautious over
China's national security law on Hong Kong, but U.S. stocks
pared earlier losses after President Trump did not announce any
new retaliatory tariffs.
China's parliament on Thursday passed national security
legislation for the city, throwing its freedoms and its function
as a finance hub into doubt.
U.S. President Donald Trump said the United States would no
longer recognize Hong Kong as sufficiently autonomous to merit
special treatment, but he made no mention of reopening the
recent U.S.-China trade deal.
U.S. stocks pared earlier losses, briefly turning positive
after Trump's statement. The Dow Jones Industrial Average .DJI
fell 32.17 points, or 0.13%, to 25,368.47, the S&P 500 .SPX
gained 8.33 points, or 0.27%, to 3,038.06 and the Nasdaq
Composite .IXIC added 96.28 points, or 1.03%, to 9,465.27.
.N
Trepidation about a further deterioration in Sino-U.S.
relations, which have soured considerably through the COVID-19
pandemic, has put investors on edge. "The market was worried he was going to announce something
substantial, something detrimental to the U.S. economy. Then as
he spoke it became clear the actions being taken were not going
to be as dramatic as originally feared," said Chris Zaccarelli,
chief investment officer at Independent Advisor Alliance in
Charlotte, North Carolina.
In Europe, the pan-regional STOXX 600 index .STOXX lost
1.44% and MSCI's gauge of stocks across the globe
.MIWD00000PUS shed 0.08%. Overnight in Asia, MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS fell 0.2%. Japan's Nikkei
.N225 retreated from a three-month high and the yen rose to a
two-week high of 107.06 against the dollar, while bonds rose.
The Chinese yuan CNY= weakened in offshore trade. CNY/
Hong Kong's Hang Seng index .HSI declined 0.8% and has
lost about 3% in the two weeks since news of China's security
legislation broke. .HK
The yield on benchmark 10-year U.S. Treasury notes
US10YT=RR last rose 0.651 basis points to 0.651%.
Federal Reserve Chair Jerome Powell on Friday reiterated the
U.S. central bank's promise to use its tools to shore up the
economy amid the coronavirus pandemic, even as investor
attention is turning to the next phase of its response.
MAY RALLY
Massive amounts of government stimulus helped lift global
stocks in May, offsetting reams of grim economic data.
Equity markets have had difficulty gauging the pandemic's
impact on earnings. But data on Friday showed a record drop in
U.S. consumer spending for the second straight month and the
highest-ever saving rate, as consumers grappled with the
uncertainties surrounding the economy. Investors, meanwhile, have been buying stocks as lockdowns
have been lifted or eased, betting on a speedy recovery.
The S&P 500 .SPX gained around 4% for the month, making it
the best May since 2009.
MSCI's All Country World Index .MIWD00000PUS , which tracks
stocks across 49 countries, was up around 3.5% this week - its
best weekly performance since April.
The euro EUR= climbed above its 200-day moving average on
Friday for the first time since late March as the European
Union's 750 billion-euro coronavirus recovery fund fueled
optimism about the EU's political future. FRX/ It was up 1.3%
month-to-date against the greenback, last trading at $1.1097.
The dollar index =USD fell 0.116% against a basket of
currencies.
U.S. gold futures GCv1 settled up 1.4% at $1,751.70 an
ounce.
U.S. crude oil prices jumped more than 5%, while Brent, the
international benchmark, also edged up. U.S. crude futures
CLc1 rose $1.78 to settle at $35.49 a barrel, while Brent
CLOc1 settled up 4 cents at $35.33 a barrel. O/R
Both contracts had their biggest monthly gains in years as
production cuts and optimism about demand recovery led by China
supported prices.
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Recovery on course? https://tmsnrt.rs/2TQdG3s
GRAPHIC-World FX rates http://tmsnrt.rs/2egbfVh
GRAPHIC-MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
GRAPHIC-Emerging markets http://tmsnrt.rs/2ihRugV
GRAPHIC-Global assets in 2020 http://tmsnrt.rs/2jvdmXl
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