Stocks fell, with emerging markets extending the longest slump in seven years, and copper declined amid concern policy makers will reduce stimulus. Treasuries gained as 10-year yields at the highest level in eight weeks attracted buyers and oil rebounded from a five-month low.
The MSCI All-Country World Index lost 0.6% at 9:30 a.m. in New York and the Standard & Poor’s 500 Index declined 0.4%. The MSCI Emerging Markets Index dropped for a 10th day, with the Hang Seng China Enterprises Index sliding the most in almost three months. Copper lost 1.9% after record monthly output in China while oil rebounded from the lowest price since May. The yield on U.S. 10-year notes fell four basis points to 2.73%. The pound jumped 0.5% to $1.5980.
Federal Reserve Bank of Atlanta President Dennis Lockhart said yesterday a paring of U.S. bond purchases “could very well take place” next month. The Bank of England brought forward the likely date for unemployment to reach the 7% level that may trigger an interest-rate increase. China’s stocks slumped after a top-level Communist Party meeting disappointed investors looking for details on policy shifts to combat a slowdown in the world’s second-largest economy.
“Tapering is obviously back on the agenda as data in the U.S. continues to be strong,” said Donald Williams, Sydney- based chief investment officer at Platypus Asset Management Ltd., which oversees about A$1.6 billion ($1.5 billion). “Everyone is suffering from scant detail on China, which makes it difficult to draw any conclusion.”
Bank of America Merrill Lynch wrote today that while Chinese reform details will come out later, “leaders still seem to emphasize stability over decisive actions” and that will make it harder to implement difficult policy changes.
The MSCI Emerging Markets Index dropped 1.3% to a two-month low. The Shanghai Composite Index slid 1.8%, the most in almost seven weeks. The Jakarta Composite Index fell 1.8% before the government reported the current-account deficit narrowed in the third quarter. Benchmark gauges in Russia, Poland, Egypt, South Africa, South Korea, Taiwan and the Czech Republic slid more than 1%.
The Stoxx Europe 600 Index lost 1% as about eight shares fell for every one that gained. ProSiebenSat.1 Media AG tumbled 5.1% as KKR & Co. and Permira Advisers LLP sold 35 million shares for about 1.1 billion euros ($1.48 billion). Stada Arzneimittel AG, Germany’s biggest publicly traded generic-drug maker, retreated 9.1% as earnings missed estimates. Intesa Sanpaolo SpA, Italy’s second-largest bank, slid 3.6% after profit fell as non-performing loans rose.
The S&P 500 extended yesterday’s 0.2% drop. Starbucks Corp. dropped in pre-market trading after saying it will pay Mondelez International Inc. $2.76 billion to settle a dispute over bagged coffee. U.S. Steel Corp. rose in pre-market trading as Morgan Stanley upgraded its recommendation on the shares. Tesla Motors Inc. rose as co-founder Elon Musk said the company won’t recall its Model S after fires involving the electric sedan.
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