Published: Sun, August 13, 2017
Business | By Max Garcia

How North Korea Tensions Impact Stock Markets — Interview

How North Korea Tensions Impact Stock Markets — Interview

The euro edged 0.3 per cent lower to 1.1726 against the dollar.

"Of course it's all come at a time when share markets are due for a correction so North Korea has provided a flawless trigger". The CBOE Volatility Index, or VIX, jumped about 44%. Titled "Reckless game over the Korean Peninsula runs risk of real war", the editorial suggested China will stay neutral if North Korea strikes first, but will intervene if the the first mover. Excluding food and energy prices, core consumer prices still crept up by 0.1% in July, matching the increases seen in the three previous months. usa wholesale prices declined in July for the first time in nearly a year. Spot gold reached a two-month high.

J.C. Penney slumped as much as 18.25 percent to a record low after the retailer reported a bigger-than-expected quarterly loss. Europe stock prices were generally lower. It hit a 15-month low of 92.548 on August 2. Against the yen, the euro last traded at 128.29 yen, down 0.2 per cent.

Gold is likely to continue to rally if U.S. Treasury yields continue to fall as well as the U.S. Dollar and U.S. stocks.

New York Federal Reserve President William Dudley expects sluggish USA inflation to rise over the next several months.

Disappointing U.S. inflation and jobs data have not helped the dollar.

"It's been a bit of a roller coaster this week, with all the rhetoric between the U.S. and North Korea", said Jeff Kravetz, regional investment strategist at U.S. Bank Wealth Management. The Nikkei finished down 0.1% at 19729.74 points. The most logical places to put the cash are the Japanese Yen, U.S. Treasurys and gold. The blue-chip index ended the week down 2.7%. Wednesday was void of any news whatsoever, whether that be political or economic. Hong Kong Exchanges & Clearing's share price was down 4.3% after second-quarter results.

MSCI's gauge of stocks across the globe shed 0.77 per cent, on track for its third straight day of declines as it pulled further back from all-time highs.

The dollar index, which measures against a basket of currencies, fell 0.05 per cent.

Oil prices fell during the Asian session despite an updated forecast from OPEC showing that demand could increase by around 200,000 barrels a day for the next two years. It now expects growth of 1.37 million barrels a day in 2017.

US President Donald Trump's brinkmanship in the escalating tensions with North Korea has taken a heavy toll on global markets, wiping $1 trillion off the value of shares worldwide.

Japan said on Tuesday it was possible that North Korea had already developed nuclear warheads and warned of an acute threat posed by its weapons programs as Pyongyang's continues missile and nuclear tests in defiance of United Nations sanctions.

"The comments by the Secretary of State is a message that nothing important has been decided on North Korea", Haruki Kawaguchi, a manager in the stock trading department at Marusan Securities, told Bloomberg News. This drove gold prices significantly higher in early trading. "Now some investors fear a giant crypto-bubble may be about to burst".

UP WITH TECH: Investors bid up technology sector shares. It fell to a one-week low of 92.99 a few minutes after the release of inflation figures.

Investors looking for upside potential in Southeast Asia's emerging economies would do well to follow Thai billionaire Dhanin Chearavanont's companies. Its weekly gain of 2.6 percent is the largest since June 2016.

The phenomenon can also be seen in the spread between indexes by Goldman Sachs Group Inc. that divide companies according to finances.

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