TSX futures fall as North Korea tensions brew

Xavier Trudeau
Août 13, 2017

Stocks saw some strength during trading on Friday, regaining ground following the sell-off seen in the previous session.

Asian stock markets slid Wednesday following Wall Street's decline as President Donald Trump and North Korea traded threats over the North's nuclear program. But by the end of the day, traders appeared to take the geopolitical drama in stride.

Thin liquidity could also amplify market moves, she added, with markets in Singapore closed for a public holiday, and many market participants in Japan taking time off this week ahead of a public holiday on Friday.The dollar index, which tracks the greenback against a basket of six major rivals, was almost flat on the day at 93.657, remaining above last week's 15-month low of 92.548.

We are anticipating the Dow Jones to open 48 points lower at 22,000 and we are calling the S&P 500down 9 at 2465. While the Nasdaq climbed 39.68 points or 0.6% to 6,256.56, the Dow inched up 14.31 points or 0.1% to 21,858.32 and the S&P 500 edged up 3.11 points or 0.1% to 2,441.32.

The euro was 0.14 percent higher against the dollar. Others anxious about lofty market valuations and pockets of weakness like the mounting red ink at JCPenney and Snap, both of which crashed to record lows on Friday.

The UK's stock market ended the week down 1.1% as worries over the situation between the U.S. and North Korea continue to rattle investors.

Trump said his earlier pledge to unleash "fire and fury" on North Korea may not have been tough enough, after Pyongyang's state run news agency said earlier it would complete plans in mid-August to fire four missiles to land near Guam.

He was responding to reports first published by the Washington Post that the belligerent state had successfully produced miniaturised nuclear weapons that could fit inside its missiles.

Geopolitical risks can boost demand for assets considered safe-haven investments, such as gold. But the moves were modest.

Australian shares were down 1.3 percent, set for a weekly loss of 0.6 percent and Chinese and Hong Kong bluechips lost 1.6 percent and 1.9 per cent respectively. It was gold's highest settlement since June 7.

U.S. stocks saw their largest losses since May on Thursday, as tensions mounted between North Korea and the US.

So it looks like the new normal on Wall Street might be a return of volatility.

Travel website operator Priceline Group Inc fell 6.9% after a disappointing financial forecast.

Materials stocks were down 1.2%.

Developments regarding the situation with North Korea may remain in focus next week, although traders are also likely to keep an eye on reports on retail sales, housing starts, and industrial production.

Shares in several other big media companies also declined.

Bond prices rose. The yield on the 10-year Treasury note slipped to 2.19 percent from 2.20 percent late Thursday.

The financial sector index (.SPSY) gave back gains after news California insurance regulator will probe whether Wells Fargo & Co (WFC.N) and an insurance company harmed residents by selling insurance they did not need.

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