Safe haven assets continue to gain weight as North Korea crisis continue to worry investors.
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Tension between the U.S. and North Korea continued to rule markets as the earnings season came to a close.
In recent developments, U.S. President Donald Trump issued a fresh round of warnings, suggesting that his previous threat to unleash “fire and fury” may not have been “tough enough”.
North Korea “better get their act together or they’re going to be in trouble like few nations ever have been in trouble in this world,” he warned. Concerns over the political standoff have taken center stage for global stocks even as the U.S. earnings season comes to a close.
Snap Inc saw shares tank 15% in pre-market trade on Friday after the self-proclaimed camera company reported results that missed estimates on both the top and bottom line after the previous session’s close.
No S&P 500 firms were scheduled to report on Friday, though attention may focus on JC Penney as the last department store reports before the bell in what has been a busy week for earnings from brick and mortar retailers.
455 S&P companies have already released earnings for the second quarter reporting period with just 20 on tap for next week, including the likes of Wal-Mart, Home Depot, Cisco, or Target.
As the S&P 500 closed Thursday with its largest drop since May, its second biggest fall this year, as tensions between the U.S. and North Korea sparked risk-off appetite.
Earlier, Asian markets ended sharply lower as Trump increased the confrontational rhetoric with the Shanghai Composite ending 1.6% lower and South Korea’s Kospi down 1.7%. The Japanese stock market was closed for a holiday.
European shares were also hit by the political uncertainty, on track for their worst weekly decline of 2017.
U.S. futures pointed to a continuation of investor caution, suggesting a lower open on Friday.
Jitters over the face-off between Trump and North Korea saw volatility spike Friday to its highest level since the results of the U.S. presidential elections last November.
Investors are looking for risk off trades, so-called safe haven assets, seen as more secure investments.
Gold continued to hold near a 9-week high on Friday as investors piled into the precious metal.
Additionally, yields on core government debt fell as market participants looking for safety drove fixed income prices higher.
Safe haven currencies such as the yen and Swiss franc (CHF) also saw buying interest, strengthening against the U.S. dollar.
Oil prices moved lower Friday, on track for weekly losses of nearly 3%, on the back of persistent worries over the global supply glut as investors waited for weekly data on U.S. drilling activity.
The International Energy Agency (IEA) said on Friday that strong demand should help the market rebalance, but noted that OPEC's compliance with the agreed production cuts in July had fallen to 75%, the lowest since the cuts began in January.
The overall global oil supply rose by 520,000 barrels per day (bpd) in July to stand 500,000 bpd above year-ago levels, the IEA said in its monthly report.
Market participants will keep an eye on increasing U.S. shale production when Baker Hughes releases its most recent weekly rig count data later on Friday.
U.S. crude oil futures fell 0.76% to $48.22 at 10:01 GMT, while Brent oil traded down 0.60% to $51.59.