– A sharp sell-off will start the week on Wall Street
after President Donald Trump said on Sunday that the U.S. will hike
tariffs on goods imported from China, casting doubt on recent optimism
that the world’s two largest economies were close to a resolution to
their trade battle.
Dow Jones Industrial Average futures dropped
457 points as of 8:32 a.m. ET which implied an opening decline of about
440 points. S&P 500 futures lost 1.5% and Nasdaq-100 Index futures
China’s stock markets, meanwhile, fell sharply. The
Shanghai Composite dropped 5.6% while the Shenzhen A Shares index
plunged more than 7%.
Trump said in a tweet Sunday afternoon that
the current 10% levies on $200 billion worth of Chinese goods will rise
to 25% on Friday. He also threatened to impose 25% tariffs on an
additional $325 billion of Chinese goods “shortly.”
The S&P 500, up 17.5% in 2019 alone, notched a record close on Tuesday. The tech-heavy Nasdaq Composite, which has soared more than 20% this year, clinched a record close on Friday. The S&P 500 is set to drop 1.5% on Monday, which would be its biggest one-day decline since March 22, when it dropped 1.9%.
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– Markets in Japan, South Korea and China traded higher on
Friday while other Asia Pacific markets, including Australia, Hong
Kong, Singapore and Indonesia, were closed for a public holiday.
The Nikkei 225 in Japan rose 0.5% to 22,200.56 as a number of tech stocks posted gains, with Nintendo shares jumping 14.12%.
Thursday, Chinese tech giant Tencent won an important approval to start
selling the Nintendo Switch game console in China, one of the largest
video games market in the world, Reuters reported. The Switch was first
released in 2017. U.S.-listed Nintendo ADRs rose more than 12% in the
In the currency market, the dollar index, which
measures the greenback against a basket of its peer, traded at 97.363,
climbing from levels near 96.900 earlier in the week. The Japanese yen
traded at 111.90 to the dollar, weakening from levels near 111.20 in the
Oil prices ticked up overnight following declines in crude exports from Saudi Arabia. Global benchmark Brent rose about 35 cents to $ 71.97 a barrel while U.S. crude was up 24 cents to $64.
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MONDAY – U.S. stock index futures rose on Monday on a report that U.S. and China are getting close to a trade deal.
This morning, the Dow Jones Industrial Average futures were up 65 points, indicating a gain of more than 70 points at the open. Futures on the S&P 500 and Nasdaq 100 were also slightly higher.
The Wall Street Journal reported that China had proposed to bring down duties on certain American goods in an attempt to strike a deal with the U.S. The same report suggested both countries are at the final stage of their negotiations, which could see the country’s leaders meeting at a special summit to sign a trade deal soon.
The Trump administration touted last week significant progress being made in U.S. negotiations with China. Treasury Secretary Steven Mnuchin told CNBC on Thursday the two sides were getting closer.
The back-and-forth on trade between the two countries has sent ripples through financial markets since last year, with investors fretting how tighter trade conditions could impact corporate profits.
On the economic front, there will be construction spending figures out at 10 a.m. ET.
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U.S. stock index futures pointed to a strong open on Friday, as Wall Street looked to build on its best start to a year in nearly 30 years.
At around 8:10 a.m. ET, Dow Jones Industrial Average futures indicated a gain of more than 170 points at the open. Futures on the S&P 500 and Nasdaq 100 were also up.
The major indexes posted solid monthly gains in February, pushing the S&P 500 to its best start to a year since 1991. The S&P 500 is up more than 11 percent for 2019, along with the Dow. The Nasdaq, meanwhile, is up 13.5 percent.
Decreasing trade tensions between China and the U.S., along with a declining fears of tighter monetary policy from the Federal Reserve, helped propel stocks higher.
Market participants are likely to closely monitor a fresh batch of economic data on Friday. Personal income, consumer spending and core PCE figures for December and January will be released at around 8:30 a.m. ET.
Manufacturing PMI, ISM manufacturing, and consumer sentiment data are all expected to follow later in the session.
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THURSDAY – Stocks were little changed at Thursday’s open as stronger-than-expected economic data were offset by talks between President Donald Trump and North Korean leader Kim Jong Un falling through.
The Dow Jones Industrial Average fell just 11 points while the S&P 500 dipped around 0.1 percent. The Nasdaq Composite fell 0.2 percent.
The U.S. economy grew at an annualized rate of 2.6 percent in the fourth quarter 2018, according to the Bureau of Economic Analysis (BEA). Economists polled by Dow Jones expected the economy to grow at a pace of 2.2 percent.
Investors were closely watching the summit in Vietnam as it could potentially impact trade negotiations between China and the U.S.
On Wednesday, U.S. Trade Representative Robert Lighthizer testified in front of House members that China needed to do more than just buy more U.S. goods for the two countries to strike a permanent trade deal. But Lighthizer said after the testimony, according to The Wall Street Journal, that formal steps would be taken to abandon plans of raising tariffs on Chinese goods.
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Chinese police have arrested 21 people involved in the operation of peer-to-peer (P2P) lender Ezubao, the official Xinhua news agency said on Monday, over an online scam it said took in some 50 billion yuan ($7.6 billion) from about 900,000 investors.
Ezubao was a Ponzi scheme, the Xinhua report said, and more than 95 percent of the projects on the online financing platform were fake.
Among those arrested were Ding Ning, the chairman of Yucheng Group, which launched Ezubao in July 2014.
It was not possible to reach Ezubao officials for comment and it was not clear if Ding had legal representation.