Global stocks drifted lower Thursday, with investors adopting a cautious stance ahead of the release of the Mueller Report into allegations of Russian election meddling later today and news of renewed weapons tests by North Korea that threaten to unravel President Donald Trump's broader Asia strategy on trade and security.
North Korea's state media said officials had tested conducted a "tactical" weapons systems test, the first since Trump and Kim Jong Un met in Hanoi earlier this year, although it did not appear to be a long-range missile capable of carrying a nuclear warhead. Nonetheless, the escalation of tensions between Washington and Pyongyang unnerved regional markets, which gave back gains in overnight trading following yesterday's rally on stronger-than-expected GDP data from China.
The region-wide MSCI Asia ex-Japan index was marked 0.3% lower heading into the final hours of trading, while Japan's Nikkei 225 closed 0.84% lower on the session at 22.090.12 points.
U.S. equity futures suggest modest declines at the opening bell on Wall Street today, as well, with investors focused on the first day of trading for the online scrapbook site Pinterest, which raised $1.4 billion in an IPO that values the group at $12.7 billion, and the release of the 400 page report lead by Special Counsel Robert Mueller into allegations that Russia interfered in the 2016 Presidential Election.
Contracts tied to the Dow Jones Industrial Average suggest a 10 point opening bell decline, while contracts linked to the broader S&P 500 indicate a 1 point pullback when the markets open at 9:30 am, the same time that Attorney General William Barr will hold a press conference to discuss the redacted report's release, which will follow at around 11:00am eastern.
Dow component Travelers Companies Inc. (TRV - Get Report) shares were marked 1% higher in pre-market trading after it posted stronger-than-expected first quarter earnings Thursday as the property and casualty insurer rode improved underwriting and sharply lower catastrophe losses to just under $800 million in net income.
Honeywell (HON - Get Report) rose 1.3% after it posted stronger-than-expected first quarter earnings, and boosted its full year outlook, thanks to a solid performance from its aerospace division.
European stocks were also weaker at the start of trading in London and Frankfurt, but rebounded later in the session with the region-wide Stoxx 600 rising 0.2 even after key PMI readings for the manufacturing sector in France and Germany for the month of April.
Activity in Germany's manufacturing sector posted its first increase in nine months, according to the April PMI reading from IHS Markit, but at 44.5 points was both weaker than expected and well shy of the 50 point mark that separates growth from contraction.
"The overall picture for Germany's private sector has changed very little according to April's flash data, with strong growth across the services economy continuing to counteract the export-led weakness in manufacturing," said IHS Markit economist Phil Smith. "Though the PMI has ticked up from March's 69-month low, it's merely signalling the same modest rate of underlying growth as seen on average over the opening quarter of the year."
Britain's FTSE 100 was also marked 0.3% lower at the opening bell in London, although trading volumes were muted ahead of a four-day Easter break, with consumers goods giant Unilever plc (UN - Get Report) leading the pack after posting stronger-than-expected first quarter sales and confirming its full-year organic revenue guidance.
Global oil prices were also active hursday, as both global and WTI crude remain within touching distance of their recent five-month highs as upward pressures from the ongoing military conflict in Libya, as well as U.S. sanctions on Iran and Venezuela, continue to keep world supplies tight.
Brent crude contracts for June delivery, the global benchmark for oil prices, were marked 29 cents lower from their Wednesday close in New York and changing hands at $71.91 per barrel while WTI contracts for May delivery were seen 29 cents lower at $64.05 per barrel.