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Stocks Sink, Havens Gain on Latest Tariff Threat: Markets Wrap

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US stocks fell to fresh 12-week lows and Treasuries rallied for a fourth day as trade exchanges by the Trump administration intensified, shaking financial markets that were already on the edge of strong global growth.

The decline of S & P 500 in May exceeded 6% and the Dow Jones Industrial Average sank in its longest streak of weekly losses since 2011, after President Donald Trump threatened to increase rates in Mexico and China prepared a blacklist of foreign companies that he accuses of damaging his interests. . The Mexican peso fell more than 2%, while the yen jumped. The yields of the Bund sank to a record while the investors looked for paradises.

Among the main movements related to trade:

Automakers in the S & P 500 fell 3.8%, with General Motors down 4.3%. Kansas City Southern sank 6.5%, mostly since November 2016. The Mexican peso fell 3% and the yen jumped 0.7%. Costco Wholesale lost 2.8%, setting a pace at food retailers. 3.6% for appliance manufacturers to reduce oil West Texas Intermediate sank 3%

The 10-year Treasury rate fell below 2.2% for the first time in 20 months, and a key part of the yield curve was further reversed, which added to investor angst at the threat of a recession The credit market's fear meters were the ones that moved the most in almost three weeks to show the riskiest junk and high-grade bond markets since January.

"When you receive bad news, you take a breath and try to understand if it is as bad as it seems. This seems pretty bad, "said Steve Chiavarone, portfolio manager at Federated Investors, in an interview at Bloomberg's headquarters in New York." Only one level of unpredictability was introduced the night before that I do not think is useful for the markets. " .

The last movement of the self-styled Customs Tariff would allocate 5% of US taxes to all Mexican imports on June 10, increasing to 25% in October, unless Mexico stops the "illegal immigrants" direct to the USA UU The evidence emerged on Friday that economic growth is slowing when a crucial measure of US inflation observed by the Federal Reserve recovered in April for the first time this year and Americans' spending and income exceeded forecasts.

Trump's statement in Mexico and a Bloomberg report that China plans to restrict exports of rare earths leave markets in a turbulent end for what has been a difficult month for global stocks. Treasury bonds have benefited from the demand for safe haven, with returns on 10-year bonds to 2.18% on Friday compared to 2.50% at the beginning of the month.

Elsewhere, gold rose to a two-week high, while oil fell to less than $ 56 per barrel in New York amid concerns about global demand.

These are the main movements in the markets:


The S & P 500 index decreased 1.3% at 9:53 a.m. In New York. The Dow average lost 1.2% and the Nasdaq 100 fell 1.3%. The Stoxx Europe 600 index fell 1.2% to the lowest in 15 weeks. The Shanghai composite index fell 0.2%. The MSCI Emerging Market Index gained 0.1%.


The Bloomberg Dollar Spot Index rose 0.3%, the highest in more than five months. The euro advanced 0.2% to $ 1.1148, the first advance in a week. The British pound decreased 0.2% to $ 1.2577. The yuan on land decreased 0.1% to 6.91 per dollar.


The yield on 10-year Treasury bonds fell four basis points to 2.18%, reaching the lowest level in almost 21 months with its fifth consecutive decline. The yield on two-year Treasury bonds fell five basis points to 2.01%. Germany's 10-year yield fell to two, the base is -0.20%, the lowest recorded. Japan's 10-year yield dropped two basis points to -0.094%, the lowest in nearly three years.

Basic products

West Texas Intermediate crude decreased 2.1% to $ 55.41 per barrel, the lowest in more than 15 weeks. Iron ore fell 1.2% to $ 96.68 per metric ton, the lowest in more than a week. Gold gained 0.6% to $ 1,296.72 per ounce, the highest in more than two weeks.

– With the help of Adam Haigh, John Ainger and Yakob Peterseil.

To contact the reporters in this story: Jeremy Herron in New York at jherron8@bloomberg.net; Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Robert Brand

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