Markets & Finance News

A gauge of world stock markets was flat on Wednesday as U.S. data that raised concerns about a slowing economy was offset by a solid start to earnings season, while sterling was volatile as negotiations on a Brexit deal continued. On Wall Street, stocks retreated after monthly retail sales data for September showed a decline for the first time in seven months, stoking concerns softness in the manufacturing sector was starting to spread to the broader economy. "Retail sales were definitely on the weaker side and given that the consumer is one of the key pillars holding up the U.S. economy, any weakness in consumer indicators is obviously a sign of concern," said Ellen Hazen, portfolio manager F.L. Putnam in Wellesley, Massachusetts. Data later in the session showed business inventories were unexpectedly flat in August, which suggested inventory investment could also drag on third-quarter economic growth. Concerns about the trade dispute between the U.S. and China also weighed. The U.S. House of Representatives on Tuesday passed legislation related to pro-democracy protests in Hong Kong, prompting China to warn in response that bilateral relations would be damaged if the measures became law. Losses were offset by a solid start to earnings season. Bank of America shares rose 1.98% following its quarterly results. Earnings for S&P; 500 companies are expected to show a decline of 3% for the quarter, according to Refinitiv data, down from 5.1% growth expected at the start of the year. "They legitimately are coming in better than expected so far, not by leaps and bounds, but incrementally, yes they are. This is not just expectations having been set really low, at least from the earnings estimate standpoint," said Hazen. The Dow Jones Industrial Average fell 9.03 points, or 0.03%, to 27,015.77, the S&P; 500 lost 6.52 points, or 0.22%, to 2,989.16 and the Nasdaq Composite dropped 30.31 points, or 0.37%, to 8,118.40. Sterling was volatile as negotiators worked to clinch a last-minute deal for Britain's exit from the European Union before an EU summit on Thursday. French President Emmanuel Macron said on Wednesday a deal with Britain on its departure from the European Union was being finalized and could potentially be agreed on at Thursday's summit. The pound had strengthened by more than 5% over the past five sessions as investors rushed to reprice the prospect of a last-minute Brexit deal before the Oct. 31 deadline. Sterling was last at $1.2824, up 0.30% on the day. The dollar index, tracking the currency against six major peers, fell 0.26%, with the euro up 0.33% to $1.1067. European stocks closed slightly lower as they contended with the conflicting reports on Brexit talks and the dawn of earnings season, holding within a tight range during the session. Companies listed on the STOXX 600 index are now expected to report a decline in third-quarter earnings of as much as 3.7%, worse than the 3% expected a week ago, according to Refinitiv data through Tuesday. In commodities, oil lost ground on concerns demand could be hurt by a slower economy, along with forecasts of a further climb in U.S. inventories. U.S. crude rose 1.17% to $53.43 per barrel and Brent was last at $59.43, up 1.17% on the day. In emerging markets, Turkey's Halkbank saw its shares drop 4.1% after U.S. prosecutors charged the state-owned lender with taking part in a multibillion-dollar scheme to evade U.S. sanctions on Iran, which the company said were part of sanctions leveled against Ankara over its military operation in Syria. Overall emerging market stocks rose 0.44%. (Additional reporting by Karen Brettell; Editing by Bernadette Baum and Kirsten Donovan)

Turkish lira markets suffered a flashback of their suffocating March squeeze on Wednesday, as authorities moved to keep a lid on volatility after a week of U.S. sanctions and legal charges.

A gauge of world stock markets was little changed on Wednesday on the heels of U.S. data that raised concerns about a slowing economy, while sterling was volatile as negotiations on a Brexit deal continued. On Wall Street, stocks edged lower after monthly retail sales data for September showed a decline for the first time in seven month, stoking concerns softness in the manufacturing sector was starting to affect the broader economy. "The retail sales figures were pretty disappointing across the board," said Benjamin Jeffery, a rates strategist at BMO Capital Markets in New York. Data later in the session showed business inventories were unexpectedly flat in August, which suggested inventory investment could also drag on third-quarter economic growth. Concerns about the trade dispute between the U.S. and China also weighed. The U.S. House of Representatives on Tuesday passed legislation related to pro-democracy protests in Hong Kong, prompting China to warn in response that bilateral relations would be damaged if the measures became law. Losses were offset by a solid start to earnings season. Bank of America shares rose 2.42% following its quarterly results. Earnings for S&P; 500 companies are expected to show a decline of 3% for the quarter, according to Refinitiv data, down from 5.1% growth expected at the start of the year. The Dow Jones Industrial Average fell 7.6 points, or 0.03%, to 27,017.2, the S&P; 500 gained 0.45 points, or 0.02%, to 2,996.13 and the Nasdaq Composite dropped 8.37 points, or 0.1%, to 8,140.34. Sterling was was volatile as negotiators worked to clinch a last-minute deal for Britain's exit from the European Union before an EU summit on Thursday. European Council President Donald Tusk said on Wednesday it should be known in seven or eight hours when Brexit could happen and in theory, a deal could be accepted on Thursday. The pound had strengthened by over 5% over the past five sessions as investors rushed to reprice the prospect of a last-minute Brexit deal before the Oct. 31 deadline. Sterling was last at $1.2796, up 0.08% on the day. The dollar index, tracking it against six major peers, fell 0.1%, with the euro up 0.15% to $1.1047. European stocks were modestly lower as they contended with the Brexit talks and the dawn of earnings season, holding within a tight range on the session. Companies listed on the STOXX 600 index are now expected to report a decline in third-quarter earnings of as much as 3.7%, worse than the 3% expected a week ago, according to Refinitiv data through Tuesday. In commodities, oil lost ground on concerns demand could be hurt by a slower economy, along with forecasts of a further climb in U.S. inventories. U.S. crude rose 1.04% to $53.36 per barrel and Brent was last at $59.24, up 0.85% on the day. In emerging markets, Turkey's Halkbank saw its shares drop after U.S. prosecutors charged the state-owned lender with taking part in a multibillion-dollar scheme to evade U.S. sanctions on Iran, which the company said were part of sanctions leveled against Ankara over its military operation in Syria. Before Turkish markets opened, authorities banned short selling on seven large Turkish bank stocks, including Halkbank. Selling shares in the banks only to buy them later in the session was also banned, authorities said. Overall emerging market stocks rose 0.35%. (Additional reporting by Karen Brettell; Editing by Bernadette Baum)

Republicans in the U.S. House of Representatives plan to introduce legislation on Wednesday that will impose sanctions on Turkey in response to Ankara's incursion into Syria, Representative Liz Cheney told reporters on Wednesday.

* Sterling rides rollercoaster of Brexit deal hopes (New throughout, updates rates and adds comments post-U.S. market open; new byline, changes dateline, previous LONDON)

Sterling came off five-month highs and stocks traded sideways on Wednesday as the European Union and Britain sought to avert a disorderly Brexit before an EU summit on Thursday. Hopes of a breakthrough lifted markets on Tuesday, but investors turned more cautious after looking for a deal during the night that never came. Conflicting reports about the ongoing talks triggered a series of sharp moves on the pound. Reports that Germany might use emergency measures to counter any market panic from a hard Brexit, such as banning bets on falling share prices, also weighed on morale. "Most of the good news that could have been anticipated has been priced in, and now there's caution it seems on whether we get a deal today or not," said Kallum Pickering, senior economist at Berenberg. Sterling was down 0.4% against the dollar with investors trading volatility levels not seen since the 2016 June Brexit referendum. The pound had strengthened by close to 5% over the past week as investors rushed to reprice the prospect of a last-minute Brexit deal before the Oct. 31 deadline. Euro zone government bonds were also volatile on Wednesday as investors watched the eleventh-hour talks. German 10-year government bond yields were last flat at -0.42%, after reaching an 11-week high of -0.397% as Bunds extended a sell-off that began on Tuesday. British government 10-year bond yields were down 2.7 basis points at 0.67%, unaffected by data showing inflation in September reached 1.7% year-on-year, below market expectations. The pan-European STOXX 600 retreated 0.1%, but Britain's domestically focused midcaps, a gauge of Brexit anxiety, fell 0.8%. Ireland's ISEQ, another vulnerable index, lost 0.6%. Earlier, shares rose in Asia. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5%. MSCI's gauge of stocks across the globe was flat. "Even though we are most optimistic that a deal does happen, we don't think the most likely outcome is that it happens by October 31, so you would be looking at some form of extension and potentially elections," said, Andrew Sheets, chief cross asset strategist at Morgan Stanley. Third-quarter earnings are expected to show an overall decline in earnings, which could also weigh on morale, Sheets said. Morgan Stanley had a below-consensus view on how companies would fare this quarter, he said. Europe's companies are struggling with uncertainties ranging from Brexit and the U.S.-China trade war to Germany's manufacturing recession. Companies listed on the STOXX 600 index are now expected to report a decline in third-quarter earnings of as much as 3.7%, worse than the 3% expected a week ago, according to I/B/E/S data from Refinitiv. Bloomberg reported, citing sources, that China will struggle to buy $50 billion of U.S. farm goods annually unless it removes retaliatory tariffs on American products, which would require reciprocal action by U.S. President Donald Trump. The U.S.-China trade war will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis, the International Monetary Fund warned on Tuesday. Global gross domestic product is now expected grow 3% in 2019, the IMF said its latest World Economic Outlook projections, down from 3.2% in a July forecast, largely because of global trade friction. U.S. stocks, which typically track the ups and downs of the trade war, were set to open in the red. S&P; 500 futures and Nasdaq futures were both down 0.3%. In commodities, Brent crude shed about 0.1 cent to $58.66 a barrel. U.S. crude rose 10 cents to $52.91 after falling the day before over fears the trade war would keep squeezing the global economy. In emerging markets, Turkey's Halkbank saw its shares and bonds plunge after U.S. prosecutors charged the state-owned lender with taking part in a multibillion-dollar scheme to evade U.S. sanctions on Iran. A day earlier, Washington had imposed sanctions on Turkish officials, raised tariffs and halted trade talks after Turkey invaded northeastern Syria in a campaign again Kurdish fighters. Before Turkish markets opened, authorities banned short selling on seven large Turkish bank stocks, including Halkbank. Selling shares in the banks only to buy them later in the session was also banned, authorities said. (Reporting by Julien Ponthus, Marc Jones and Olga Cotaga; editing by Larry King)

The dollar held near a four-week low on Wednesday as trade tension between Washington and Beijing continued to weigh on the global growth outlook.

* China will struggle to buy $50 bln of US farm goods - Bloomberg

European equities opened lower and sterling came off five-month highs on Wednesday as the European Union and Britain resumed talks in Brussels to avert a disorderly Brexit before an EU summit on Thursday and Friday. Hopes of a breakthrough lifted markets on Tuesday, but investors turned more cautious stance after looking for a deal during the night that never came. "Most of the good news that could have been anticipated has been priced in, and now there's caution it seems on whether we get a deal today or not," said Kallum Pickering, senior economist at Berenberg. The pound was down 0.5% against the dollar with investors trading volatility levels not seen since the 2016 June Brexit referendum. The pound had strengthened by close to 5% over the past week as investors rushed to reprice the prospect of a last-minute Brexit deal before the Oct. 31 deadline. The pan-European STOXX 600 retreated 0.3%. Britain's domestically focused midcaps, a gauge of Brexit anxiety, fell 1%. Earlier, shares rose in Asia. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5%. MSCI's gauge of stocks across the globe was flat. "Even though we are most optimistic that a deal does happen, we don't think the most likely outcome is that it happens by October 31, so you would be looking at some form of extension and potentially elections," said, Andrew Sheets, chief cross asset strategist at Morgan Stanley. Third-quarter earnings are expected to show an overall decline in earnings, which could also weigh on morale, Sheets said. Morgan Stanley had a below-consensus view on how companies would fare this quarter, he said. Europe's companies are struggling with uncertainties ranging from Brexit and the U.S.-China trade war to Germany's manufacturing recession. Companies listed on the STOXX 600 index are now expected to report a decline in third-quarter earnings of as much as 3.7%, worse than the 3% expected a week ago, according to I/B/E/S data from Refinitiv. Bloomberg reported, citing sources, that China will struggle to buy $50 billion of U.S. farm goods annually unless it removes retaliatory tariffs on American products, which would require reciprocal action by U.S. President Donald Trump. The U.S.-China trade war will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis, the International Monetary Fund warned on Tuesday. Global gross domestic product is now expected grow 3% in 2019, the IMF said its latest World Economic Outlook projections, down from 3.2% in a July forecast, largely because of global trade friction. In commodities, Brent crude shed about 0.1 cent to $58.66 a barrel. U.S. crude rose 10 cents to $52.91 after falling the day before over fears the trade war would keep squeezing the global economy. In emerging markets, Turkey's Halkbank saw its shares and bonds plunge after U.S. prosecutors charged the state-owned lender with taking part in a multibillion-dollar scheme to evade U.S. sanctions on Iran. A day earlier, Washington had imposed sanctions on Turkish officials, raised tariffs and halted trade talks after Turkey invaded northeastern Syria in a campaign again Kurdish fighters. Before Turkish markets opened, authorities banned short selling on seven large Turkish bank stocks, including Halkbank. Selling shares in the banks only to buy them later in the session was also banned, authorities said. (Reporting by Julien Ponthus and Marc Jones, editing by Larry King)

The U.S. dollar will remain the world's leading reserve currency over the next 25 years, with the euro and renminbi expected to further increase their share of total central bank reserves, according to UBS' survey of sovereign institutions including major central banks released on Wednesday.