Up and down, then up again: Just another rollercoaster day on markets

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The Age

The Age

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This was published 5 years ago

Up and down, then up again: Just another rollercoaster day on markets

By Brendan Walsh & Sarah Ponczek
Updated

Wall Street veered through another dizzying cycle on Tuesday, shooting to big gains early in the morning before erasing those gains, then reversing course yet again to close higher as investors weighed the prospects for a trade deal and an agreement to fund the American government.

The S&P 500 Index recovered from the day's lows as key US Senate leaders signalled a desire to avoid a government shutdown hours after Donald Trump threatened he would be "proud" to do so in a spat over funding for his border wall.

Carmakers rose as China indicated it may cut tariffs on auto imports, but investors were cautious about a broader deal.

Up and down and up and down: Traders are starting to get used to the volatiliy.

Up and down and up and down: Traders are starting to get used to the volatiliy.Credit: Bloomberg

The US dollar rose against most major currencies alongside the oil prices. The Aussie dollar also edged higher, inching back above the US72¢ mark.

US stocks have been whipsawed in recent weeks as traders searched Trump's tweets for clues about the outlook for trade talks, tried to decide if a stock selloff could prompt the Federal Reserve to pare back rate increases and evaluated economic data that indicated a slowdown may be coming.

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"It went from headline excitement to cold reality challenges," said Mike Bailey, the director of research at FBB Capital Partners. "You've got a pretty skeptical market out there."

The news on car tariffs followed reports that Chinese Vice Premier Liu He discussed a timetable for trade talks with Treasury Secretary Steven Mnuchin.

Yet investors also have an eye on the continuing flap over Canada's arrest of Meng Wanzhou, the chief financial officer of Huawei Technologies, and the Washington Post reported that the Trump administration is preparing a series of actions this week to condemn China for efforts to steal US technology.

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And among a plethora of political risks, the UK is struggling to put its Brexit deal back on track and fears linger over the possibility a French protest movement could escalate further.

Elsewhere, the Stoxx Europe 600 Index climbed the most in six weeks. India's assets saw a choppy session, with stocks initially roiled by a surprise resignation of the central bank governor on Monday, before posting a recovery. Emerging-market shares edged higher.

Here are the main moves in markets:

Stocks

  • The S&P 500 rose 0.7 per cent in afternoon trading in New York.
  • The Stoxx Europe 600 Index rose 1.5 per cent.
  • The MSCI All-Country World Index added 0.6 per cent
  • The MSCI Emerging Market Index rose 0.3 per cent.
  • The Nikkei-225 Stock Average slipped 0.3 per cent.

Currencies

  • The Bloomberg Dollar Spot Index gained 0.1 per cent.
  • The Australian dollar added 0.26 per cent to US72.09¢.
  • The euro fell 0.3 percent to $US1.1319.
  • The Japanese yen was little changed at 113.29 per dollar.
  • The British pound fell 0.4 per cent to $US1.2515.
  • The MSCI Emerging Markets Currency Index was little changed.

Bonds

  • The yield on 10-year Treasuries rose one basis point to 2.87 per cent.
  • Germany's 10-year yield fell one basis point to 0.23 per cent.
  • Britain's 10-year yield fell one basis point to 1.18 per cent.

Commodities

  • The Bloomberg Commodity Index fell 0.1 per cent.
  • West Texas Intermediate crude rose 1.3 per cent to $US51.65 a barrel.
  • Gold slipped 0.2 per cent to $US1,242.21 an ounce.

Bloomberg 

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