Stocks Close Lower Before Inflation, Retail Data: Markets Wrap

Industrials retreat from big weekly gains as tariffs loom

Yen climbs on government land scandal; commodities decline

Chris Brankin of TD Ameritrade Singapore says "our customers are still bullish."

U.S. stocks finished the day lower as uncertainty over the prospect of tariffs undid some of the market’s recent job-driven advances and investors looked forward to Tuesday’s U.S. inflation report. Treasuries increased, while the dollar and most commodities fell.

The S&P 500 Index rallied 3.5 percent last week, with the biggest gains coming after a labor market report underscored economic strength that gave fresh impetus to the nine-year-old bull market in global equities. But U.S. President Donald Trump put markets on edge after he raised the prospect of a full-fledged trade war. With data due from China this week as well as readings on U.S. inflation and retail sales, investors will be looking for more reasons to keep the party going.

“With earnings season wrapped up, tax reform launched, and steel and aluminum tariffs to take effect soon, investors will have plenty to ponder,” John Stoltzfus, the chief investment strategist of Oppenheimer & Co., wrote in a note to clients Monday. “We believe patience, fortitude and an eye for opportunities that could present themselves as interest rates work through the process of normalization, trade negotiations garner attention and equity markets respond to it all, could prove rewarding.”

The Dow Jones Industrial Average and the S&P 500 finished lower Monday, while the tech-heavy Nasdaq 100 kept its head above water. The Stoxx Europe 600 Index is on its longest winning streak since October, while gauges from Tokyo to Sydney jumped.

The yen strengthened as political clouds gathered around Japan’s Finance Ministry, run by a stalwart ally of Prime Minister Shinzo Abe. Finance Minister Taro Aso is under pressure after his ministry altered documents tied to a controversial land sale. Aso has been Abe’s deputy since he took office in December 2012, and is seen as a key backer of the Abenomics program, part of which focuses on weakening the yen to boost the nation’s exports.

Bloomberg Economics’ Jamie Murray says a global trade war could cost $470 billion by 2020.

(Source: Bloomberg)

Bitcoin fell for the fifth straight weekday and West Texas crude moved lower after last week’s advance. Emerging-market stocks surged.

Terminal users can read more in our markets blog.

Here are some of the key things happening this week:

China data on industrial production, retail sales and fixed-asset investment all out on Wednesday are likely to point to slower growth, according to Bloomberg Economics forecasts.

Key indicators for the Fed dominate the economic agenda in the coming week. Headline inflation may have edged up to 2.2 percent in February from 2.1 percent, though consensus before Tuesday’s report is for core inflation to remain at 1.8 percent.

The U.S. Treasury will sell $21 billion of 10-year notes and $13 billion 30-year bonds at March 12-13 auctions, plus $28 billion of three-year notes, the most since 2014. Last month’s auction of those maturities drew lackluster demand.

Prices and factory output are focal points in the euro area. Friday’s second inflation report for February may touch 1.2% from 1.1% the previous month.

Also this week, Germany’s Angela Merkel is inaugurated to a fourth term, EU27 government officials discuss the European Union’s Brexit position, and U.K. Chancellor of the Exchequer Philip Hammond issues his spring statement.

And these are the main moves in markets:

Stocks

The S&P 500 Index fell 0.1 percent as of 4 p.m. New York time, the biggest decline in over a week.

The Stoxx Europe 600 Index rose 0.3 percent, its sixth consecutive advance.

The U.K.’s FTSE 100 Index declined 0.1 percent.

The MSCI Emerging Market Index gained 1.3 percent to the highest in more than five weeks.

Currencies

The Bloomberg Dollar Spot Index fell 0.3 percent.

The euro increased 0.3 percent to $1.234.

The British pound gained 0.4 percent to $1.391.

The Japanese yen rose 0.4 percent to 106.35 per dollar, the largest advance in more than a week.

Bonds

The yield on 10-year Treasuries declined two basis points to 2.86 percent.

Germany’s 10-year yield fell two basis points to 0.63 percent.

Britain’s 10-year yield increased less than one basis point to 1.494 percent.

Commodities

West Texas Intermediate crude decreased 1.1 percent to $61.36 a barrel.

Gold rose less than 0.05 percent to $1,323.97 an ounce.

The Bloomberg Commodity Index declined 0.3 percent.

— With assistance by Adam Haigh, and Samuel Potter

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