BLBG: Commodities Fall on Trade Concerns as Earnings Bolster Stocks
Japanese import slump adds to signs of slowdown in commerce
GM rallies on earnings as Credit Suisse falls on rights offer
A deepening slump in global trade weighed on prices of raw materials, with U.S. oil near the lowest close in three weeks. Emerging markets and currencies of commodity producers fell, while European and U.S. equities rose on corporate earnings.
The Bloomberg Commodity Index fell 0.4 percent, as U.S. oil traded below $46 a barrel and aluminum declined for a sixth day. The ruble, ringgit and rand weakened, while the Shanghai Composite Index tumbled the most in a month amid speculation a recent rally was overdone. European shares and U.S. stocks futures gained, with General Motors Co. rising after earnings and Credit Suisse Group AG declining on a rights issue.
“Markets have relaxed a bit, but there are still a lot of jitters around global growth,” said Dirk Thiels, the Brussels-based head of investment management at KBC Asset Management, which oversees 204 billion euros ($232 billion). “There’s a lot of hope on the earnings season.”
Japan said September imports tumbled more than 11 percent versus a year earlier, following similarly weak data from China and Germany. Ebbing demand in major economies may weigh on global growth, while also increasing the chances of the Federal Reserve delaying rate hikes and of the European Central Bank stepping up quantitative easing.
Commodities
West Texas Intermediate crude fell 1.5 percent to $45.59 a barrel as of 8:10 a.m. in New York, and Brent lost 0.5 percent to $48.46. U.S. crude stockpiles, already about 100 million barrels above the five-year seasonal average, probably expanded for a fourth week as production outstripped demand, according to a Bloomberg survey before an Energy Information Administration report on Wednesday.
Representatives of the Organization of Petroleum Exporting Countries and producers outside the group are meeting in Vienna. Venezuela will present evidence that oil at $88 a barrel is required to guarantee investments, President Nicolas Maduro said on state television Wednesday.
Aluminum fell 1.5 percent in London to $1,522.00 a metric ton, marking the longest retreat in three months. Copper dropped 0.2 percent and nickel lost 0.3 percent.
Gold was little changed at $1,176.95 an ounce as investors await next week’s meeting of Fed policy makers for clues on the timing of a U.S. rate increase.
Emerging Nations
A Bloomberg index of 20 emerging-market currencies slid for a fourth day, the longest such streak since Sept. 23. The ruble and rand both fell about 1 percent. The ringgit lost 0.4 percent. Malaysia is Asia’s only major net oil exporter.
The MSCI Emerging Markets Index lost 0.5 percent, sliding for a second day. The Shanghai Composite fell 3.1 percent, the most since Sept. 15, led by smaller companies. Turkish shares fell 1 percent and Saudi Arabia had a 2.2 percent decline.
Stocks
The Stoxx Europe 600 Index rose 0.3 percent, and Standard & Poor’s 500 Index E-mini futures expiring in December advanced 0.5 percent.
Credit Suisse lost 2 percent after saying it will raise about 6.05 billion Swiss francs ($6.3 billion) of capital. The bank’s reorganization will also increase its focus on Switzerland and wealth management in Asia, while scaling back the securities unit.
GM rose 3.1 percent in early New York trading following third-quarter earnings that surpassed analyst estimates. Restaurant chain Chipotle Mexican Grill Inc. declined about 8 percent after reporting profit below expectations.
An easing of U.S. stock volatility has caused the ProShares VIX Short-Term Futures ETF to tumble 26 percent this month.
Japan’s Topix index rose 1.8 percent, closing at a seven-week high, as speculation grew that the central bank will boost monetary easing after the weaker-than-expected trade data.
Currencies
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, rose 0.1 percent. The Federal Reserve is due to review monetary policy next week in its penultimate meeting for 2015, with odds on a rate increase not rising above 50 percent until March 2016.
The Canadian dollar slid 0.2 percent before the nation’s central bank announces its latest policy decision. New Zealand and Australia’s dollars also dropped.
The euro was little changed at $1.1357. It rose 0.2 percent last session after a report from the European Central Bank indicated continued improvement in lending conditions. That may suggest officials can hold off from extending asset purchases.
Bonds
Yields on benchmark 10-year Treasuries fell two basis points to 2.05 percent. They have hovered near 2 percent since the start of the month. A gauge of U.S. sovereign bond market volatility dropped to 71 basis points this week, from 95 basis points as recently as August, as futures traders predict the Fed will be sidelined until March.
The yield on 10-year German bunds slid three basis points to 0.59 percent. Portuguese government bonds declined after Socialist opposition leader Antonio Costa said he can form a stable government backed by a majority in parliament, increasing investor uncertainty about who will lead the nation. The 10-year yield rose four basis points to 2.46 percent.
About 17 billion euros of bonds sold in Europe on Tuesday, including corporate issuance, making it the busiest day in the syndicated market since Feb. 10, according to data compiled by Bloomberg.
