Global Stocks Waver as Gold and Bitcoin Soar
June 25 2019 - 9:33AM
Dow Jones News
By Will Horner -- Allergan jumps almost 30% in early trading on AbbVie takeover
-- Gold rallied and government bond yields slipped
-- Bitcoin advanced, reaching a one-year high
U.S. stock futures slipped Tuesday, along with shares in Europe
and Asia, as investors turned to haven assets such as Treasurys and
gold.
The Dow Jones Industrial Average and S&P 500 futures were
both down roughly 0.1%. Shares of Allergan rose nearly 30% in
premarket trading after AbbVie reached a deal to buy the company
for more than $60 billion. The news prompted a 8% slide in AbbVie's
stock.
In Europe, the Stoxx Europe 600 index fell 0.1%, with French and
German equities dragging down the benchmark. One of the few bright
spots for investors was in Capgemini and smaller rival Altran
Technologies: the stocks soared after the French companies agreed
to merge, sending Altran shares up almost 22% while Capgemini
advanced 7.4%.
Meanwhile, gold prices jumped to their highest level this year
before paring back slightly to $1,426.10 a troy ounce. The precious
metal has gained 13% so far in 2019.
Gold prices were rising because of "a positive cocktail of
factors" from lingering global growth worries and U.S.-China trade
tensions to escalating fears of a conflict between the U.S. and
Iran, said Carsten Menke, a commodities analyst at Julius Baer.
"If you take everything together you have quite a bullish
environment for gold. Then you have technical levels which have
been broken like $1,380 or $1,400 and that's why we've had such a
sharp rally," he said.
Bitcoin extended its gains, reaching a record for the past year
as it again crossed the $11,000 threshold. The world's most popular
cryptocurrency has soared 35% this month, boosted in part by the
unveiling of Facebook's Libra digital currency for mainstream users
last week.
In Asia, Japan's Nikkei was down 0.4%, the Hang Seng in Hong
Kong slipped 1.2% and China's benchmark Shanghai composite fell
0.9%.
The yield on the 10-year U.S. Treasury note, which falls as the
price rises, dropped to 2.013%, from 2.021% on Monday.
U.S. markets are gearing up for a busy day of speeches from
Federal Reserve policy makers Tuesday as they look for clues on the
course of U.S. monetary policy.
Investors this week have also largely held back from making big
moves as their focus has shifted to the G-20 summit in Japan due to
begin on Friday. A planned meeting between President Trump and
Chinese President Xi Jinping at the summit is seen as a potentially
crucial moment in the trade dispute between the two nations. The
skirmish has roiled markets this year and threatened to further
weaken the global economy, which has already shown signs of
flagging after a long period of expansion.
"Prudence is still justified because obviously the bar is quite
high for a truce between the U.S. and China on tariffs at this
week's G-20," said Kenneth Broux, a senior strategist at Société
Générale. "The danger is of course that everything ends in acrimony
and the whole moves of the past week or so reverse if the U.S.
decides to raise tariffs to 25% on the remaining $300 billion [of
Chinese goods]."
The WSJ Dollar Index, which tracks the dollar against a basket
of its peers, was broadly flat.
Elsewhere in commodities, oil prices were mixed with global
benchmark Brent crude shedding 0.2% to $64.02 a barrel, while U.S.
benchmark West Texas Intermediate was down 0.1% at $57.82.
(END) Dow Jones Newswires
June 25, 2019 09:18 ET (13:18 GMT)
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