Stocks slip as drug company shares drag Wall Street lower

YELLEN FOCUS: Federal Reserve Chair Janet Yellen said again that the Fed is more likely to raise interest rates soon.

In addition to firmly stating that she has no plans of leaving the Fed before her term as chair is complete, Yellen also made clear that her views on bank regulation differ from Trump’s.

The currency’s surge hit dollar-denominated commodities including gold which fell to fresh five-month lows, and iron ore, which saw its worst one-week loss since May.

Imminent higher interest rate environment arising out of the US Federal Reserve’s hawkish tone along with heavy capital outflows took a toll on the rupee, a forex dealer said. The Fed has raised rates only once in the last decade, and traders have prematurely called for impending raises, but they are growing increasingly confident that short term rates could jump to 0.75 percent next month.

Japan’s Nikkei 225 Stock Average entered a bull market after it extended its rally from a June low to more than 20 percent after the S&P 500 Index came within four points of a record on Thursday. Still, the sharply higher bond yields that have followed Trump’s election, if they continue, would mean higher mortgage rates that could depress home purchases.

U.S. equities and bond yields rallied after Trump delivered a victory speech that seemed to signal that he was tacking to the center, which investors had originally expected him to do this summer, after he won the Republican nomination and entered the general election campaign. The only two major releases are due on Wednesday with the durable goods orders data and jobless claims release. Cisco stocks fell 5.4% on weak earnings forecast in Q4.

Shoppers are not buying as many clothes and moving toward discount chains. Volkswagen was the top performer among the automakers: its shares added 1.2% on positive corporate news. Copper dipped 2 cents to $2.47 a pound.

The biggest losers on the FTSE 100 were Fresnillo down 95p to 1,289p, Rolls-Royce Holdings down 41.5p at 657.5p, Randgold Resources down 295p at 5,790p, and Polymetal International down 26p at 762.5p. EURUSD went 0.08% up to 1.0631. STOXX EUROPE 600 lost 0.3%.

DOLLAR SEEING GREEN: Already at its highest mark since early 2003, the dollar continued to climb. Online competitor Amazon rose $3.88 to $750.37. Broader Topix edged up 0.4% to 1,428.46.

In other words, emerging markets, which had previously enjoyed dollar liquidity as investors searched for yield in an environment of near-zero and even negative interest rates, could face a dollar shortage as interest rates and bond yields start to rise.

As interest rates, the stock market, and the us dollar are rising, precious metals have lost their luster. In addition, consumer prices rose by 0.4 percent in October, the biggest rise since April and an indication that inflation is starting to move closer to the Fed’s target. In Dublin 10-year bond interest rates rose early on Friday to more than 1 per cent, before easing back to just under 1 per cent later in the day. Financials were the top performers with Commonwealth Bank of Australia and Westpac Banking Corp up by 0.3%.

The greenback has climbed 7.3 percent against the yen in two weeks, its steepest such gain since January 1988 and its second-strongest performance in the era of floating exchange rates.

US West Texas Intermediate crude was up 27 cents, or 0.6%, for the day, at $US45.69 a barrel. The oil was advancing as OPEC proposed Iran to cap its output at 3.92mln barrels a day while energy ministers of Saudi Arabia and Russian Federation supported the oil freeze deal.