Wall Street slips ahead of data, turmoil abroad eyed

By Wayne Cole and Pete Schroeder

SYDNEY/WASHINGTON (Reuters) – U.S stocks kicked off the week lower, as investors took a measured stance ahead of key data on consumer spending amid concerns about China’s property sector and elections in Argentina.

The three major U.S. indices all opened lower Monday, with the down 0.21%, the losing 0.17% and the dropping 0.19% in early trading.

The tepid open came after a decline in global equity markets, with the MSCI world equity index, which tracks shares in 45 nations, last down 0.66%.

In China, there were fears that trouble in its largest private property developer, Country Garden, could have a chilling effect on home buyers and financial institutions.

Country Garden’s shares plunged 18% to a record low on Monday after its onshore bonds were suspended.

“We reckon that markets still underestimate the aftermath of the significant collapse in China’s property sector,” said Nomura analysts in a note.

There was plenty to be watching elsewhere in the world, too, as Argentine voters punished the two main political forces in a primary election on Sunday, pushing a radical libertarian outsider candidate into first place, and pressuring the country’s bonds.

In the aftermath, the country’s central bank planned to raise interest rates and devalue its currency to 350 pesos per dollar, according to an official source.

On this week’s data docket is British inflation and jobs data and figures on U.S. retail sales which are forecast to show a 0.4% pick up in spending, with risks to the upside thanks in part to Amazon (NASDAQ:)’s Prime Day. U.S. retail giants are also due for quarterly reports this week.

Such an outcome would challenge the market’s benign outlook for U.S. rates, with futures implying a 70% chance the Federal Reserve is done hiking. The market also has more than 120 basis points of cuts priced in for next year starting from around March.

The resilience of the economy combined with a truly massive government borrowing requirement kept 10-year Treasury yields up at 4.21%, after a rise of 12 basis points last week.

That rise also boosted the dollar. The , which tracks the greenback versus a basket of six currencies, was last up 0.6% to 103.454.

The ascent of the dollar and yields was weighing on gold at $1,904 an ounce, after having fallen for three weeks in a row. [GOL/]

Oil dipped as concerns about China’s faltering economic recovery and a stronger dollar outgunned seven weeks of gains on tightening supply from OPEC+ output cuts.

was down 0.8% at $86.13 a barrel, while was down 0.77% at $82.55.