* U.S. Retail sales data tops expectations
* German investor morale survey worse-than-expected
* Mounting no-deal Brexit worries knock pound
(Updates with open of U.S. markets, changes dateline; previous
LONDON)
By Chuck Mikolajczak
NEW YORK, July 16 (Reuters) - A gauge of global equities
edged lower on Tuesday and U.S. Treasury yields climbed as a
stronger-than-anticipated report on retail sales raised the
possibility that a second rate cut by the Federal Reserve this
year could be pushed back by several months.
U.S. retail sales rose 0.4% in June, as households stepped
up purchases of motor vehicles and a variety of other goods. The
solid number comes on the heels of recent data showing a strong
labor market and a pickup in consumer prices. While the Fed is still largely expected to cut rates by a
quarter of a percentage point at its July 30-31 policy meeting,
expectations for a more aggressive half a percentage point cut
have been scaled back. "One of the things I have been wringing my hands over is
this divergence between very strong consumer confidence and
retail sales that have just been going nowhere so maybe we are
starting to close the gap," said Jack Ablin, chief investment
officer at Cresset Capital Management in Chicago.
"I don't know if this is going to take the Fed off its July
easing plan but it could perhaps push the second rate reduction
out a few months."
The Dow Jones Industrial Average .DJI rose 17.04 points,
or 0.06%, to 27,376.2, the S&P 500 .SPX fell 3.12 points, or
0.10%, to 3,011.18 and the Nasdaq Composite .IXIC dropped 9.50
points, or 0.12%, to 8,248.68.
With earnings season underway, banking shares were in focus
after a mixed bag of results from JPMorgan JPM.N , Goldman
Sachs GS.N and Wells Fargo WFC.N . The S&P banks sector was
off 0.2%. Other data showed manufacturing output in the U.S. picked up
steam in June, while import prices declined the most in six
months. The data boosted U.S. Treasury yields, while the improving
economic picture has seen the U.S. yield curve steepen in the
past week. Benchmark 10-year notes US10YT=RR last fell 11/32 in price
to yield 2.1288%, compared with 2.092% late on Monday.
European equities rose as disappointing data out of Germany
and new concerns over Brexit helped boost expectations for
stimulus from the European Central Bank.
Germany's ZEW indicator showed that the mood among investors
in Europe's largest economy deteriorated more than expected in
July, with the survey pointing to the unresolved China-U.S.
trade dispute and to political tensions with Iran. The pan-European STOXX 600 index .STOXX rose 0.38% and
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.08%.
The dollar strengthened versus the euro as a result of the
disparate data while a debate between the two candidates to
become Britain's next prime minister sent the pound tumbling
because of heightened worries about a no-deal Brexit.
The dollar index .DXY rose 0.35%, with the euro EUR=
down 0.34% to $1.1219. Sterling GBP= was last trading at
$1.2415, down 0.81% on the day.
Oil prices steadied as a resumption of production in the
Gulf of Mexico after Hurricane Barry and a boom in U.S. supply
from shale oil countered tensions in the Middle East.
U.S. crude CLcv1 rose 0.03% to $59.60 per barrel and Brent
LCOcv1 was last at $66.76, up 0.42% on the day.
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Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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