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GLOBAL MARKETS-Stocks, gold little changed as trade war spurs concerns

Published 10/12/2019, 07:25 am
Updated 10/12/2019, 07:28 am
© Reuters.  GLOBAL MARKETS-Stocks, gold little changed as trade war spurs concerns
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(Adds gold, oil settlement prices)

* Chinese exports fall, highlight trade war damage

* Trade war worries weigh on stocks, oil

* Fed, ECB meet later this week

By Herbert Lash

NEW YORK, Dec 9 (Reuters) - Global equity markets traded flat on Monday as investors hoped officials would delay more U.S. tariffs set to take effect on Chinese goods this coming Sunday, while gold held firm as investors hedged against a possible escalation in the trade war.

Crude oil prices fell and the dollar slipped against the safe-haven Swiss franc after data showed Chinese exports in November shrank for the fourth straight month, reviving concerns about damage to global demand caused by the 17-month trade spat.

A Dec. 15 deadline that will usher in $156 billion in U.S. tariffs on Chinese goods stirred caution, leading MSCI's all-country world index to trade flat while shares on Wall Street slid and European equities closed lower.

Investors have bid up stocks in recent weeks, pushing the three major Wall Street indexes close to new record highs and MSCI's gauge of global equity performance to less than three points from its all-time peak.

Buoyed by Friday's blockbuster U.S. jobs report, traders and investors held out hope for a delay in the U.S. tariff deadline, while expecting more positive gestures from both sides.

Large-cap U.S. equities are trading at about 17.5 times forward earnings, said Michael Mullaney, director of global markets research at Boston Partners in Boston. The S&P 500 could reach 3250 or 3300 next year if a trade agreement reached, he said.

"The market right now already have a favorable resolution (to the trade talks) baked into the prices," Mullaney said, but if no trade deal is forthcoming, prices could fall 7% to 10%, he said.

China hopes it can reach a trade agreement with the United States that satisfies both sides, Assistant Commerce Minister Ren Hongbin told reporters overnight. gauge of stocks across the globe .MIWD00000PUS shed 0.05%, while stocks on Wall Street traded little changed and slid in Europe.

The pan-European STOXX 600 index .STOXX lost 0.24%. Wall Street, the Dow Jones Industrial Average .DJI fell 69.63 points, or 0.25%, to 27,945.43. The S&P 500 .SPX lost 5.82 points, or 0.19%, to 3,140.09 and the Nasdaq Composite .IXIC dropped 19.29 points, or 0.22%, to 8,637.24. dollar index .DXY , a measure of the greenback against six other major trading currencies, fell. the Swiss franc, which tends to draw investors during times of geopolitical or financial stress, the dollar was 0.21% lower.

The dollar index .DXY fell 0.05%, with the euro EUR= up 0.05% to $1.1063. The Japanese JPY= yen weakened 0.05% versus the greenback at 108.65 per dollar.

U.S. Treasury yields fell after rising three straight days as risk appetite ebbed after the weak Chinese trade data. 10-year notes US10YT=RR rose 4/32 in price to yield 1.8294%.

German exports rose unexpectedly in October, a morale boost for Europe's largest economy, but it had little impact on the European bonds. on Germany's 10-year bund DE10YT=RR , a benchmark for the euro zone, fell to -0.304%.

Oil prices fell on the Chinese export data. futures LCOc1 fell 14 cents to settle at $64.25 a barrel. West Texas Intermediate oil futures CLc1 slid 18 cents to settle down at $59.02 a barrel.

U.S. gold futures GCcv1 settled mostly unchanged at $1,464.90 an ounce.

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