Portugal and Italy led declines in European bonds and stocks dropped while gold climbed. Emerging-market shares fell from a 16-month high.

The yield on Portugal’s 10-year bond jumped 19 basis points to 3.84 percent by 9:53 a.m. in London. Italy’s rate rose six basis points to 2.90 percent. The Stoxx Europe 600 Index slipped 0.1 percent and Standard & Poor’s 500 Index futures were little changed. The MSCI Emerging Markets Index fell for the first time in eight days. Brent oil extended the longest slump since May 2010 and gold climbed 0.3 percent. Rupiah forwards extended gains as unofficial counts in Indonesia’s presidential race showed Joko Widodo leading.

Banque Privee Espirito Santo, a bank unit of Espirito Santo Financial Group SA, said yesterday there was a delay in payments on some short-term debt securities issued by Espirito Santo International. Minutes of the Federal Reserve’s June meeting are due today after Internet stocks including Twitter Inc. drove U.S. declines yesterday on concern they have risen too far too fast. Global equities retreated the last three days after total world market capitalization hit a record $66 trillion last week.

“You’d be foolish to be taking any huge bets on markets,” Mark Lister, head of private wealth research at Craigs Investment Partners Ltd., which has about $6.8 billion under management, said by phone from Wellington. “I definitely think we should still be positioned for a pullback. Markets are pretty fully valued and we’re now probably moving into a more moderate period for growth and returns.”

Gold, Bonds

Gold, seen as a haven investment, climbed to $1,324.41.

Japan’s 10-year government notes paid 0.548 percent, about 1 basis point less than yesterday and touched 0.545 percent, the lowest since April 11 last year. Yields on Australian government bonds due in a decade fell a second day, declining five basis points, or 0.05 percentage point, to 3.52 percent.

The rate on similar-maturity Treasuries was little changed at 2.56 percent after falling five basis points in New York to cap the biggest two-day drop since May. The U.S. will auction $21 billion of the securities today.

A gauge tracking 20 emerging-market currencies against the U.S. dollar climbed to the highest since May 26 today. Just two of 24 developing economy currencies were weaker versus the greenback today.

Ruble, Yuan

The ruble advanced 0.4 percent to 34.0955 per dollar, the highest this month.

China’s yuan rose to the strongest level in three months as talks got underway with the U.S. The currency climbed 0.07 percent to 6.1977 per dollar. China Foreign Exchange Trade System prices show. It touched 6.1940, the strongest level since April 9. The People’s Bank of China raised the reference rate by 0.1 percent, the most in a month, to 6.1565. The yuan traded 0.7 percent weaker than the fixing, within the 2 percent limit.

China’s consumer price index rose 2.3 percent in June from a year earlier, after gaining 2.5 percent in May. The median of 51 economists’ estimates compiled by Bloomberg was for an advance of 2.4 percent. The country’s measure of producer prices, which hasn’t shown a year-on-year increase since January 2012, fell 1.1 percent versus a prediction of a 1 percent decline. It dropped 1.4 percent in May.

Too Optimistic

The Shanghai Composite Index slipped 1.2 percent as just two of 50 stocks on the Hang Seng Index advanced today. Sands China Ltd. dropped 3.3 percent and Galaxy Entertainment Group Ltd. slipped 2.6 percent amid concerns that Macau casino revenue growth is slowing.

China Resources Land Ltd. and China Overseas Land & Investment Ltd., both state-controlled developers, slipped more than 2 percent. Sino Land Co. fell 3.9 percent, the biggest decline on the Hang Seng Index. Markets are too optimistic about the prospects for China’s property downturn being shortlived, Bank of America Merrill Lynch strategists led by David Cui wrote in a note dated yesterday.

Brent declined 0.3 percent to $108.62 a barrel, the eighth consecutive drop. Gold advanced to $1,323.20 an ounce, the first increase in three days.

Zinc climbed 0.7 percent to $2,297 a metric ton after trading yesterday at a 35-month high of $2,318.50 a ton.

U.S. Declines

The S&P 500 dropped 0.7 percent to close at 1,963.71 in a second day of losses, while the technology-heavy Nasdaq Composite Index slid 1.4 percent, its steepest one-day decline since May. Twitter and Pandora Media Inc., which trade at more than 150 times projected earnings, plunged at least 7 percent in U.S. trading. The S&P 500 trades at 16.6 times projected earnings, above a five-year average valuation of 14.3.

Three rounds of monetary stimulus from the Fed and better-than-forecast corporate earnings have driven the S&P 500 up more than 190 percent from a low reached in March 2009. The minutes due today are from the Fed Open Market Committee’s June 17-18 meeting, when policy makers trimmed monthly asset purchases by $10 billion for the fifth straight occasion, saying economic growth and the job market are improving.

Alcoa Inc. (AA) jumped more than 1 percent in after-hours trading as the company that unofficially kicks off U.S. earnings seasons reported sales and profit that exceeded analysts’ estimates. Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs, Yahoo! Inc. and Johnson & Johnson are among companies reporting financial results in the next week.

‘Fully Valued’

Profit at companies in the S&P 500 probably increased 5 percent in the three months through June, while sales rose 3 percent, estimates compiled by Bloomberg show. The forecasts are lower than they were at the beginning of April, when analysts projected earnings to rise 7.3 percent and sales to increase 3.7 percent.

 

Source: bloomberg

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