Week Ending 10th August 2018
Stocks sold off around the world, with U.S. equities erasing what would’ve been a sixth weekly gain as Turkey’s economic crisis deepened. The dollar capped its best week since June as the lira sank to a record.
The S&P 500 Index slumped in thin trading, zapping gains that had taken it within striking distance of an all-time high. European and emerging-market equities bore the brunt of selling, with losses of more than 1 percent after the U.S. escalated a diplomatic row that tipped Turkey’s economy deeper into crisis.
The 10-year yield slid below 2.9 percent as price data reinforced the Federal Reserve’s rate-hike intentions and investors sought havens. A government report on agriculture stocks sent soybean, cotton and wheat futures tumbling. Oil settled above $67 a barrel.
Geopolitical tensions between the U.S. and other countries set the tone for markets this week, with a speech from President Recep Erdogan doing little to quell investor angst that Turkey’s crisis will spread to other economies. The Trump administration doubled tariffs, exacerbating the issue.
Earlier in the week, China responded to the Trump administration’s trade war volley with additional tariffs of its own. The ruble fell the most since the 2015 oil shock after the U.S. announced new sanctions on Russia over a nerve-agent attack in the U.K. Amid it all, Elon Musk roiled Tesla Inc.’s shares with a tweet signaled he’d take the firm private. The stock ended lower than where it was at the time of the missive.
These are the main moves in markets:
The S&P 500 fell 0.7 percent as of 4 p.m. in New York. It dropped 0.25 percent on the week.
The domestically focused Russell 2000 Index slipped 0.3 percent.
The Stoxx Europe 600 Index sank 1.1 percent.
Germany’s DAX Index lost 2 percent.
The MSCI Emerging Market Index fell 1.7 percent.
The MSCI Asia Pacific Index dipped 1 percent.