The market's reaction to North Korea this week is historically unusual

The market's reaction to North Korea this week is historically unusual

The North's latest threat came as US President Donald Trump warned Tuesday that North Korea will be met with "fire and fury" should it stick to ambitions to hit the US with ballistic missiles.

The S&P/TSX composite index fell 143.08 points to 15,074.25, with almost all of its sectors moving lower. The Russell 2000 index of smaller-company stocks gave up 18 points, or 1.3 percent, to 1,378.

The S&P 500 dropped the most since May and MSCI's gauge of stocks across the globe .MIWD00000PUS lost 1.1 percent in its third straight day of declines, as it pulled further back from all-time highs. It had risen more than 1 percent on Wednesday, one of its largest single-day jumps against the euro since the Swiss National Bank removed its cap on the currency in January 2015.

Trump doubled down on his remarks Thursday, saying his previous statement may not have been tough enough.

Silver prices also continued to move higher over the last 24 hours and now they threaten to break through the key $17 region which should only be a matter of time if the tensions between North Korea and the United States continue to dominate the headlines.

Sterling was little changed at US$1.30 and near a 2-1/2-week low, as investors looked to key data due next week for clues on the health of the British economy as the country prepares to leave the European Union.

Investors reacted by driving up the price of gold and bonds, traditional safe investments.

THE QUOTE: "Risk-averse sentiment is dominating global equities markets, and USA indices have retraced from record levels over the last two days". The Nasdaq composite advanced 0.4% to 6,408.

Trump threats are toothless - but endanger us all
Risch's comments come after intelligence reports suggest the country could be preparing to launch a missile towards the U.S. The speaker of the Guam Legislature says he hopes the island can defend itself in the event of an attack from North Korea.

The stage was set for the US indexes to go lower early Wednesday as investors around the world reacted to the rising war of words between the USA and North Korea, pushing global market indexes lower.

"Traders have finally started to wake up to the risks out there, with North Korea acting as the initial catalyst this week", Colin Cieszynski, chief market strategist at CMC Markets, told MarketWatch.

He said: "Equity markets, including Korea, have tended to react less and less to this posturing - the Korea Composite Stock Price index was only down 1% on Tuesday".

Meanwhile, gold stocks bucked the downtrend, driving the NYSE Arca Gold Bugs Index up by 1.3%. US -traded Nikkei futures fell 2 percent to their lowest since mid-May.

Investors opted for the perceived safety of US Treasuries, which pushed the yield on the 10-year note three basis points lower to 2.21 percent.

ENERGY: Benchmark U.S. crude gained 1 cent to $49.57 a barrel in electronic trading on the New York Mercantile Exchange.

Heightened geopolitical tension remained a drag on global equity markets, with havens assets from the yen to gold in demand. Brent crude, used to price worldwide oils, added 26 cents to $52.96.

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