Published: Sat, August 12, 2017
Economy | By Annette Adams

Investors move to safe havens as USA and North Korea trade threats

Investors move to safe havens as USA and North Korea trade threats

US DATA: The other potential driver in markets will be upcoming USA economic data, including monthly inflation figures, which could go a long way to determining expectations for the pace at which the Federal Reserve raises interest rates.

"The data confirms the Fed will have a wait-and-see attitude", said King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco.

Also adding support to gold was disappointing U.S. economic data which reduced the chances of a U.S. Federal Reserve interest rate hike later this year.

Gains among technology companies helped snap a three-day losing streak for US stocks Friday, though the market ended with its worst weekly loss since March.

North Korea had responded to Trump's previous promise to unleash "fire and fury" with a threat to land a missile near the U.S. Pacific territory of Guam.

MOUSE HOUSE: Disney dropped 4.9 percent a day after the media giant reported a weak quarter and said it would pull its movies from Netflix and start two of its own video streaming services.

The Dow Jones Industrial Average .DJI closed down 204.69 points, or 0.93 percent, at 21,844.01, the S&P 500 .SPX lost 35.81 points, or 1.45 percent, to end the session at 2,438.21 and the Nasdaq Composite .IXIC fell 135.46 points, or 2.13 percent, to 6,216.87. Silver gained 20 cents, or 1.2 percent, to $17.07 an ounce.

European bourses also looked set to open lower across the board, with Eurostoxx 50 futures already down 0.7 percent in early trade. Earlier in Asia, Japan's benchmark Nikkei 225 slipped less than 0.1 percent, while Hong Kong's Hang Seng slid 1.1 percent.

Such tensions remained high, with North Korea's state media saying on Thursday that North Korea will develop a plan by mid-August to launch intermediate-range missiles at the U.S. territory of Guam.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds in a crisis.

South Korean shares, which have been among the strongest performers in the world so far this year, fell 1 percent, while the won lost around 0.6 percent to 1,134.70 to the dollar.

The market was waiting for United States consumer inflation data on Friday that would offer more clues about future Fed decisions.

Market sentiment remained largely in risk-off mood on Thursday as the latest escalation of tension between North Korea and the United States showed no sign of dissipating.

The U.S. dollar fell to 110.48 yen from 110.72 yen late Monday.

Sterling was last trading at $1.3013, up 0.30 percent on the day. The VIX Index - commonly called the fear gauge - jumped to close at its highest level since the USA election.

Investors opted for the perceived safety of US Treasuries, which pushed the yield on the 10-year note three basis points lower to 2.21 percent. Discovery Communications fell 94 cents, or 3.9 percent, to $23.36.

METALS: Gold added $10.80, or 0.8 percent, to settle at $1,290.10 an ounce.

Frankfurt's DAX 30 was also down, shedding some 0.8 percent. Nevertheless, APRN is down 12.7% in pre-market trading, headed for a record low.

Like this: