Investing.com - Here are the top five things you need to know in financial markets on Monday, June 3:
1. Risk aversion escalates amid trade threats
Global stocks and commodities fell on Monday while safe-haven demand bid up prices for sovereign debt, as escalating trade tensions and new tariff threats exacerbated worries over a possible global slowdown.
Read more: Expanded Trade War, Plunging Yields Will Keep Rattling Markets - Pinchas Cohen
Dow futures pointed to a nearly 100-point drop at the open while the yield on the U.S. 10-year Treasury fell to its lowest level since September 2017, moving closer to 2.0% and widening the curve inversion with the 3-month note. The yield on the German 10-year equivalent fell to a record low of -0.22% on Monday.
In the ongoing Sino-U.S. trade dispute, China increased the pressure by accusing Washington of “intimidation and coercion” and dubbed U.S. demands as “exorbitant”. Beijing also opened an investigation into FedEx (NYSE:FDX) after Huawei said it diverted to the United States two packages intended for the company's offices in China.
With U.S. President Donald Trump’s plans to place tariffs on all imports from Mexico to the U.S. underway, a senior Mexican delegation was set to begin high level talks on Monday in Washington.
Broadening the scope of trade tensions, The New York Times reported that White House trade advisers had urged the imposition of tariffs on Australian aluminum, whose exports to the U.S. have surged over the last year.
Trump meanwhile traveled to the U.K. on Monday for his first official state visit after urging Britain to “walk away” from negotiations with the European Union if it could not get a “fair deal” on Brexit.
2. Global manufacturing in contraction ahead of U.S. ISM
Purchasing managers indexes from around the world showed that manufacturing activity either contracted or stagnated in Mayl.
Manufacturing PMIs were below the 50-point mark separating contraction from expansion in Japan, South Korea, Malaysia and Taiwan. China's showed modest expansion at 50.2, although the official government gauge on Friday also showed contraction.
The euro zone manufacturing PMI registered 47.7 in May, its fourth consecutive contraction, only slightly above a six-year low.
For the U.S., the Institute of Supply Management will release its manufacturing PMI at 10:00 AM ET (14:00 GMT) Monday. Economists expect the gauge to remain in expansion with a slight uptick to 53.0 after hitting a three-year low in April.
3. Apple preps for WWDC
Apple (NASDAQ:AAPL) will kick off its Worldwide Developers Conference (WWDC) at 1:00 PM ET (17:00 GMT) with a stage presentation by company executives.
Apple is expected to present the latest version of its iOS operating system, which a Bloomberg report suggested could have new, faster animations for the multitasking interface and for closing apps, along with improvements to the iPad and updates to Apple-made apps.
WWDC, which focuses on software, is one of the company's biggest corporate events of the year, but takes place this year under the shadow of the spreading trade war, which threatens to cap Apple's growth in the vital Chinese market.
4. Boeing warns of defective parts
Boeing (NYSE:BA) announced on Sunday that some of its 737 planes could have defective parts on their wings, adding to the problems it faces getting its 737 MAX planes back in the air.
The Federal Aviation Administration indicated that the issue would not bring down the plane, but could damage it while in flight.
Separately, the International Air Transport Association announced Monday that it plans to hold a meeting on June 26 with carriers, aircraft manufacturers and regulators to discuss preparation of a unified message on the 737 MAX’s return to service.
5. Google slumps after network congestion caused outage
Shares in Alphabet (NASDAQ:GOOGL) fell more than 3% in premarket trade after its Google unit experienced high levels of congestion in the eastern U.S. brought down several of its services, including Google Cloud, G Suite and YouTube, on Sunday.
Google later said it had identified the root cause and resolved the issue, without providing specific details.
SnapChat, owned by Snap Inc . (NYSE:SNAP), also experienced user issues that some attributed to its use of Google Cloud.