Stocks Retreat, Treasuries Climb on Growth Caution

Stocks and U.S. equity futures fell Monday amid concern elevated inflation and a resurgence of the pandemic will weigh on global demand. Oil dropped after an OPEC+ supply deal. The Stoxx Europe 600 index headed for a six-week low as it retreated for a fourth straight session, the longest streak of losses since October. Travel and leisure stocks led the decline along with basic resources as all 20 market sectors slid. MSCI Inc.’s gauge of Asia-Pacific shares hit the lowest in about a week, with Japan and Hong Kong underperforming and technology stocks struggling.

The rally in Treasuries continued, sending 10-year yields further below 1.3%. The dollar strengthened against major peers amid cautious sentiment. Emerging-market stocks and currencies weakened. A global rally in equities has paused as investors consider whether inflation pressures will sap the economic rebound from the pandemic, in part by leading central banks to pare monetary policy support and also as consumers balk at higher prices. The decline in Treasury yields may be a signal of cracks in the global recovery as the delta Covid-19 variant forces some nations to impose virus curbs.

Reserve Bank of Australia meeting minutes TuesdayEuropean Central Bank rate decision ThursdayBank Indonesia rate decision ThursdayU.S. existing home sales ThursdayThe Tokyo Summer Olympics begin Friday

Stocks

Futures on the S&P 500 fell 0.4% as of 8:16 a.m. London timeFutures on the Nasdaq 100 slipped 0.2%Futures on the Dow Jones Industrial Average dropped 0.5%The Stoxx Europe 600 declined 1.2%The MSCI World index fell 0.5%

Currencies

The Bloomberg Dollar Spot Index rose 0.2%The euro fell 0.1% to $1.1789The British pound fell 0.3% to $1.3726The Japanese yen was little changed at 109.99 per dollar

Bonds

The yield on 10-year Treasuries was little changed at 1.28%Germany’s 10-year yield was little changed at -0.36%Britain’s 10-year yield declined one basis point to 0.62%

Commodities

West Texas Intermediate crude fell 1.5% to $70.75 a barrelGold futures fell 0.6% to $1,803.80 an ounce

Stocks Retreat, Treasuries Climb on Growth Caution: Markets Wrap, Bloomberg, Jul 19