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Dollar, bond yields fall as investors weigh Trump woes
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Dollar, bond yields fall as investors weigh Trump woes
Aug 22, 2018 9:29 PM

Key US government debt yields slid to six-week lows on a flight to safety and the dollar slid further on Wednesday as investors weighed how a conviction and a guilty plea of former advisers will impact US President Donald Trump.

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A gauge of global equities rose, lifted by higher energy prices and strong earnings from retailers, on day that Wall Street marked the longest US bull market. That milestone came a day after the S&P 500 stock index set an all-time intraday high.

Markets barely budged after the release of minutes from the Federal Reserve's policy meeting that ended Aug. 1.Futures traders priced in a slightly higher chance that the Fed will increase rates two more times this year.

"They are just trying to gauge if there has been any shift in sentiment at the Fed, and it certainly doesn't seem that way at the moment," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.

The White House pushed back forcefully against suggestions that a plea deal struck on Tuesday by Trump's former lawyer Michael Cohen implicated the president in a crime.

Trump was not charged and Cohen's plea deal does not mean the president has been implicated in anything, press secretary Sarah Sanders said at a White House briefing.

Cohen pleaded guilty to charges of tax evasion, bank fraud and campaign finance violations. Also on Tuesday, Trump's former campaign chairman Paul Manafort was convicted on eight charges.

"The potential for President Trump to be impeached didn't change all that much, and as a result of that the market didn't over react in this instance to that news," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

Equity investors appeared less concerned about Trump as Wall Street marked what is widely considered a bull market that started in the midst of the global financial crisis a decade ago, which wiped out more than half of the US stock market's value.

The benchmark S&P 500 index has more than quadrupled since the lows of March 2009.

Wall Street was mixed, with Nasdaq trading higher but the S&P and Dow industrials lower on a slide in shares of industrials, consumer discretionary and staples.

Shares in Europe rose slightly, with the blue-chip FTSE 100 gaining 0.11 percent while the pan-European FTSEurofirst 300 index closed flat.

MSCI's gauge of stocks across the globe gained 0.26 percent and emerging market stocks rose 0.72 percent.

The Dow Jones Industrial Average fell 88.69 points, or 0.34 percent, to 25,733.6. The S&P 500 lost 1.14 points, or 0.04 percent, to 2,861.82, and the Nasdaq Composite added 29.92 points, or 0.38 percent, to 7,889.10.

The dollar index fell 0.19 percent and the euro rose 0.24 percent to $1.1597. The Japanese yen weakened 0.20 percent versus the greenback, at 110.53 per dollar.

Benchmark U.S. Treasury 10-year notes rose 7/32 in price to yield 2.8189 percent.

Oil prices rose more than 2 percent, with Brent hitting a two-week high, after US government data showed a larger-than-expected draw in domestic crude inventories and as Washington's sanctions on Iran signalled tightening supplies.

Brent crude, the international benchmark, rose $2.15 to settle at $74.78 a barrel. US crude settled up $2.02 at $67.86.

Oil also found support from the weaker dollar, which makes oil less expensive for buyers using other currencies.

US gold futures for December delivery settled up $3.30 at $1,203.30 per ounce.

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