Opening Bell: Treasurys, Stocks Climb In Unison As Investors Cover All Bases

 | Jun 06, 2019 06:50

  • Curve inversion steepens as yields resume their plunge
  • European shares and U.S. futures climb with safe-haven assets, in rare formation
  • Chinese stocks' heavy underperformance raises red flag for global bull market
  • WTI slips into bear market but posts some gains on threat of U.S.-Iran conflict
    • h2 Key Events/h2

    U.S. Treasurys returned to the spotlight this morning, climbing again after U.S. President Donald Trump lamented lack of progress with Mexico, thereby increasing the odds he'll press ahead with tariffs on the Latin American country. Oil entered a bear market, further darkening the horizon and prompting gains in gold as well. However, European stocks gained ground for the fourth straight day and U.S. futures edged higher, in rare formation as both risk and safe-haven assets edged higher.

    Futures on the S&P 500, Dow and NASDAQ 100 suggested the sharpest two-day rally since the beginning of the year may resume. Meanwhile, the STOXX 600 advanced with utilities and healthcare, which offset losses in carmakers triggered by a failed merger attempt between Fiat Chrysler (NYSE:FCAU) and Renault (PA:RENA). Renault’s shares plunged as much as 8% in Paris and Fiat was traded 3.8% lower in Milan—though both recouped some losses in the later European morning— after investors saw prospects of what could have been a group worth $39 billion of combined market value and the world’s third-largest carmaker evaporate.

    In the earlier Asian session, regional stocks slid lower as trade negotiations on both the Chinese and the Mexican front were derailed, with the latter pressuring the Mexican peso lower. Data from the U.S. showing the weakest job creation in almost a decade worsened sentiment.