S&P closes barely lower despite N. Korea tensions

USD/JPY Fundamental Daily Forecast – Rises if Risk is On, Falls if Risk is Off
Gold gains on escalating North Korea tensions
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13 August, 2017

"The escalation of the geopolitical situation between the US and North Korea is beginning to rattle investors' nerves as was witnessed in the VIX index yesterday", said Peter Cardillo, chief market economist at First Standard Financial.

Strong gains in NY, where the Dow saw repeated record highs up until three day ago, had kept investor optimism high when news of the conflict first broke, Currie said. The Nasdaq added 39.68 points, or 0.6 percent, to 6,256.56.

"European indices are following their Asian counterparts lower once more today, as the risk aversion seen over the past two days continues apace", said IG market analyst Joshua Mahony in a note. The Korean won fell against the USA dollar.

The Toronto Stock Exchange's S&P/TSX composite index fell 143.08 points to 15,074.25, with almost all of its sectors moving lower.

Stock movers: Henkel fell 3.4% after the maker of Schwarzkopf hair care products, Right Guard deodorant and Persil detergent posted second-quarter organic sales growth of 2.2%, which was below consensus of 3.2%, according to Investec.

Nasdaq 100 e-minis were down 1 points, or 0.02 percent, on volume of 49,062 contracts.

Materials, home to gold producers and other resource-based companies, was the only gainer among the index's 10 main sectors and was up 0.6 percent. The S&P 500 is up 9 percent, while the Dow is up 10.6 percent.

There were fewer signs of anxiousness in the markets Friday.

Kohl's stock dropped almost six percent despite better than expected earnings. It's still the highest it's been since May.

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.

Investors also drew some encouragement from new government data showing USA inflation at the consumer level inched higher last month.

Inflation has risen 1.7 percent over the past 12 months, suggesting that inflation pressures remain well under control. But some economists say the Fed may stand pat for the rest of 2017 unless inflation accelerates in coming months.

USA crude oil tumbled 2% to $48.59/bbl, failing to hold above $50 as a report from OPEC showed crude production among the group's members rose in July. Brent crude, used to price global oils, gained 29 cents to $52.43 in London.


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