Economy

North Korea has markets nervous but not panicked

North Korea has markets nervous but not panicked”

Trump was responding to North Korea's claim it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific territory of Guam. The statement says that "only absolute force" can work on someone as "bereft of reason" as Trump.

Chief market analyst at CMC Markets Micheal Hewson agreed that investors have become used to tensions between the US and North Korea in recent years, but the "inexperience" of the US President has led market participants to adopt a "safety-first" approach.

Trump's remarks on Tuesday that North Korea would face "fire and fury like the world has never seen" weighed on Wall Street and drove up the VIX "fear gauge", or the cost of protection against a drop in the S&P 500. "You're less than 2 percent off the high for the S&P heading into a weekend where uncertainty with North Korea still lingers".

The Labor Department said consumer prices edged up 0.1% in July following no gain in June.

But are investors really nervous about a possible military conflict with Kim Jong Un? On the Nasdaq, 2,303 issues fell and 567 advanced.

The Dow slumped 204.69 points or 0.9 percent to 21,844.01, the Nasdaq plummeted 135.46 points or 2.1 percent to 6,216.87 and the S&P 500 tumbled 35.81 points or 1.5 percent to 2,438.21.

The U.S. equity market is hovering near record levels and volume has been tepid following the onset of summer.

In Europe, Britain's FTSE100 was down over one percent, Germany's DAX traded 0.5 percent lower, while the French CAC40 index was 0.62 percent in the red, as of 9:00am GMT. It is trading at its best level in two months, and is threatening to crack the $1,300 level for the first time since the day following the U.S. presidential election.

Charter Communications rose 2.9 percent on news Altice is exploring a bid for the cable giant.

In bond markets, the yield on U.S. Treasuries fell, also pressured by the lowered expectations for a Fed move.

Information technology fell 1.24 percent, hurt by a 16.6 percent plunge to 66.50 Canadian dollars (52.38 dollars) in Kinaxis Inc. stock.

Falling crude prices made oil & gas stocks a weight too, dropping 1% with Tullow Oil the biggest faller.

Benchmark U.S. 10-year notes last rose 6/32 in price to yield 2.1905 percent, from 2.211 percent late on Thursday.

For now, the dollar remained on the back foot, pulling back 0.1% to Sf0.9635 on Friday, after dropping as much as 1.2% to a two-week low overnight.

At 3:15pm BST, the Comex gold futures contract for December delivery was up 1.09% or $13.90 to $1,293.20 an ounce, as the precious metal extended overnight gains, of almost 2% stateside, with yet another rally in Asia and Europe.



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