Monday April 2nd

2-04-2018

Stocks set for a weak open as China slaps new tariffs on US goods

U.S. stock index futures posted losses ahead of Monday's open, as investors reacted to new tariffs from China and looked ahead to fresh economic data. At around 8:10 a.m. ET, Dow Jones industrial average futures fell 134 points, indicating a 70-point decline at the open. Nasdaq 100 and the S&P 500 futures were also indicating a negative open for their respective markets. An ongoing trade spat between the U.S. and China continued to develop, with China announcing overnight that it was implementing tariffs on 128 types of U.S. imports starting Monday. That matched the list of products proposed by Beijing in March and comes as a direct response to President Donald Trump signing off on tariffs on imported steel and aluminum last month. China said in March that those goods had an import value of $3 billion in 2017. Asia Pacific stocks mostly edged higher on Monday, despite the tariffs. In Europe, most markets were closed again for the Easter holidays. Japan's benchmark Nikkei 225 lost steam late in the trading session, reversing gains seen earlier in the day to close down 0.31 percent, or 65.72 points, at 21,388.58. Elsewhere, South Korea's Kospi index slipped 0.07 percent to end at 2,444.16. Mainland markets were narrowly mixed at the end of the session, with the Shanghai composite finishing lower by 0.16 percent at 3,163.86 and the Shenzhen composite adding 0.16 percent to close at 1,856.66. Markets in Australia, Hong Kong and New Zealand were closed on Monday for the Easter holiday. Back in the U.S., a March manufacturing PMI is due to be released at 9:45 a.m. ET, while a March ISM manufacturing index and a February construction spending index are both set to be released at 10 a.m. ET. Cal-Maine Foods is due to report new figures before the bell, while Switch will be out with new earnings after the closing bell. International oil prices rose towards $70 a barrel on Monday, lifted by a drop in drilling activity in the United States and concerns that Washington could reintroduce sanctions against Iran, OPEC's third biggest oil producer. U.S. drillers cut seven oil rigs in the week to March 29, bringing the total down to 797, the first decline in three weeks. The rig count is closely watched as an indicator of future U.S. oil output. Brent crude futures were at $69.65 per barrel, up 31 cents by 8:33 a.m. ET (1233 GMT). It was still below its 2018 high of $71.28 reached on Jan. 25. U.S. WTI crude futures were rose 17 cents to $65.11 a barrel, after finishing the first quarter up 7.5 percent. Gold prices rose on Monday as the dollar eased amid renewed concerns over a trade war after China imposed extra tariffs on U.S. products in response to U.S. duties on imports of aluminium and steel. After falling in the past three trading sessions, spot gold edged up 0.4 percent to $1,329.24 per ounce at 0343 GMT.