S&P 500 Index Heads Toward Worst Month in More Than Three Years

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U.S. stocks declined, with the Standard & Poor’s 500 Index on the verge of its worst month in more than three years, as investors harbored concerns about slowing global growth and the impact of a potential interest-rate increase by the Federal Reserve as soon as September.

Equities earlier trimmed their losses after energy shares reversed a 2.5 percent selloff to rally as much as 1.4 percent. The move followed a jump in oil prices after a government report reduced its crude production estimates. Equities trading has been whipsawed by gains and losses since last week as markets remain subject to sudden shifts in investor sentiment.

The S&P 500 lost 0.5 percent to 1,979.98 at 12:13 p.m. in New York, after earlier falling as much as 1.2 percent before trimming the drop to less than 0.2 percent. The Dow Jones Industrial Average sank 55.42 points, or 0.3 percent, to 16,587.59. The Nasdaq Composite Index slipped 0.4 percent.

The S&P 500 is down 5.9 percent this month, remaining on pace for the most since May 2012, as China’s currency devaluation earlier this month spurred concern over global growth, erasing more than $5.3 trillion in equity market values worldwide. The benchmark’s 0.9 percent gain last week masked a volatile period in which the S&P 500 plunged the most since 2011 to enter a correction, only to rally more than 6 percent over two days for its best back-to-back gains since the beginning of the bull market in 2009.

The Chicago Board Options Exchange Volatility Index rose 7.3 percent Monday to 27.96. The measure of market turbulence known as the VIX is on its way to a record monthly jump, up 127 percent. More than $2 trillion of share value was erased from U.S. markets between the end of July and the lowest levels of last week, a sum equal to roughly two years of S&P 500 earnings, data compiled by Bloomberg show.

While August ranks in the middle among months based on share performance, it has produced some of the worst returns of the year since 2009. During the week ended August 12, 2011, the S&P 500 alternated between gains and losses of at least 4 percent for four days, something never seen in 88 years of data compiled by Bloomberg. In 2013, the S&P 500 fell 3.1 percent in August, one of only two months of negative returns in a year when the index surged 30 percent.

Source : Bloomberg

Aussie Above Six-Year Low as Traders Look to RBA for Direction

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Australia’s dollar held above a six-year low as traders waited for comments from Reserve Bank Governor Glenn Stevens on the exchange rate in Tuesday’s policy-meeting statement.

The Aussie traded within a cent of the 70.50 U.S. cents it reached last week for the first time since April 2009. In the statement following last month’s meeting, Stevens refrained from indicating the currency was overvalued for the first time in more than a year as policy makers held the benchmark interest rate at a record-low 2 percent. Australia’s dollar dropped the most since May last week amid a stock rout in China.

Australia’s dollar was little changed at 71.09 U.S. cents as of 9 a.m. in Tokyo from Monday, when it fell for the first time in three days. A 2 percent slump last week was the worst since the period ended May 29.

Source : Bloomberg

Japan Stocks Fall Second Day as Investors Watch China Markets

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Japanese stocks fell for a second day, led by iron and steel producers, after the Topix index posted its worst monthly loss in three years, as confidence waned that China will be able to prop up its markets amid slowing economic growth.

The Topix slipped 0.6 percent to 1,527.88 as of 9:01 a.m. in Tokyo, after Monday capping its biggest monthly plunge since May 2012. The Nikkei 225 Stock Average fell 0.7 percent to 18,756.04. The yen traded at 121.11 per dollar after strengthening Monday for the first time in five days. The official gauge of China’s manufacturing industry will fall to a three-year low in August, according to the median of economist estimates compiled by Bloomberg before data due Tuesday.

Concern that slowing Chinese growth will hamper global expansion reemerged after Federal Reserve officials signaled they are prepared to raise interest rates as soon as next month.

The rout in global equities last month erased more than $5 trillion from the value of shares as Chinese policy makers tried to bolster their market amid growing concern that its economy may be in worse shape than analysts had estimated. Morgan Stanley reduced its forecast for world growth this year and next on Monday, citing weakening industrial activity in China.

Source: Bloomberg

U.S. Stocks Decline as S&P 500 Posts Worst Month Since May 2012

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U.S. stocks declined, with the Standard & Poor’s 500 Index posting its worst month in more than three years, as investors harbored concerns about slowing global growth and the impact of a potential interest-rate increase by the Federal Reserve as soon as September.

The S&P 500 lost 0.8 percent to 1,972.15 at 4 p.m. in New York, capping its biggest monthly slide since May 2012. The gauge in earlier trading fell as much as 1.2 percent before nearly erasing the retreat. The Dow Jones Industrial Average sank 0.7 percent to complete its worst monthly drop since May 2010.

Equities trimmed their losses in the late morning after energy shares in the benchmark index reversed a 2.5 percent selloff to rally as much as 1.4 percent. The move followed a jump in oil prices after a government report reduced its crude production estimates and OPEC said it’s ready to talk to other global producers to achieve “fair prices.” Stocks have been whipsawed by gains and losses since last week as markets remain subject to sudden shifts in investor sentiment.

The S&P 500 ended down 6.3 percent this month as China’s currency devaluation earlier this month spurred concern over global growth, erasing more than $5.3 trillion in equity market values worldwide. The benchmark’s 0.9 percent gain last week masked a volatile period in which the S&P 500 plunged the most since 2011 to enter a correction, only to rally more than 6 percent over two days for its best back-to-back gains since the beginning of the bull market in 2009.

More than $2 trillion of share value was erased from U.S. markets between the end of July and the lowest levels of last week, a sum equal to roughly two years of S&P 500 earnings, data compiled by Bloomberg show.

While August ranks in the middle among months based on share performance, it has produced some of the worst returns of the year since 2009. During the week ended August 12, 2011, the S&P 500 alternated between gains and losses of at least 4 percent for four days, something never seen in 88 years of data compiled by Bloomberg. In 2013, the S&P 500 fell 3.1 percent in August, one of only two months of negative returns in a year when the index surged 30 percent.

Source : Bloomberg

Gold Decline Fifth Time in Six Sessions on Revived Rate Concerns

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Gold futures declined for the fifth time in six sessions as comments by a Federal Reserve official reignited concern that U.S. interest rates will climb this year.

Fed Vice Chairman Stanley Fischer said over the weekend there is "good reason" to believe inflation will accelerate, boosting speculation that the central bank won’t delay its first rate increase since 2006. Stubbornly low inflation along with the prospect of tighter U.S. monetary policy has kept a lid on the metal, which doesn’t pay interest or offer returns, unlike competing assets.

Gold pared gains from earlier this month, when a slowdown in China and a global market rout raised speculation that the Fed would wait longer before raising rates. Rather than providing a refuge from the meltdown, bullion’s volatility rose along with a measure of equity turbulence, diminishing its appeal as a haven. The metal rose 3.4 percent in August, the first advance since May.

In New York, gold futures for December delivery slid 0.1 percent to settle at $1,132.50 an ounce at 1:41 p.m. on the Comex. Prices dropped 2.2 percent last week, the most in a month.

The probability that the Fed will increase rates before the end of 2015 rose to 63 percent on Monday, up from 48 percent a week earlier, futures trading showed. Gold is heading for a third straight annual decline as a resilient U.S. economy reduced some investors’ faith in the metal as a store of value.

Silver futures for December delivery gained 0.3 percent to $14.586 an ounce on the Comex.

Source: Bloomberg