S&P Down for Fourth Straight Session; Japan’s Monthly Deficit Exceeds Expectations; Euro, U.S. Treasury Yield Rise
S&P Down for Fourth Straight Session (Bloomberg)
All three major U.S. stock indices fell Monday, as investors await the release of the Federal Open Market Committee’s minutes. The S&P 500 declined to its lowest level since July 8. “This market has been on the weaker side in the last few weeks, digesting recent gains,” Eric Green, director of research and fund manager at Penn Capital Management, said.
As the Nikkei rose almost one percent, the Japanese monthly trade deficit exceeded expectations for the thirteenth straight month on Monday. The yen continued to fall against the dollar, and some experts suggested that investors must be patient with the economy. “It takes up to a year between currency depreciation and what happens with exports and imports,” said Lim Say Boon, CIO of DBS Group Wealth Management.
The euro jumped to a two-week high against the yen and surpassed the dollar today, boosted by comments from the Bundesbank, Germany’s Central Bank. The Bank stated that the European Central Bank’s low-interest-rate pledge hasn’t been set in stone. However, the euro’s gains paled in comparison to the rise in U.S. 10-Year Treasury yields, which grew to 2.90 percent — their highest point in two years. “We’ve seen the Bundesbank comments support the euro earlier in London, although it has come off since this morning due to the back-up in Treasury yields,” said Brian Kim, currency strategist, at RBS Securities in Stamford, Connecticut.