Friday August 31st

31-08-2018

US stocks set for a weak open as trade tensions flare

U.S. stock index futures came under pressure ahead of Friday's open, as investors remained cautious as a NAFTA deadline drew closer. Around 8:02 a.m. ET, Dow futures dropped 62 points, indicating a lower open of about 48 points. The S&P 500 and Nasdaq futures also pointed to an anemic start to the month's final day of trading. Markets in Asia and Europe also posted solid losses Friday. Friday marks the deadline for a new trade deal to be secured by the U.S., Mexico and Canada. While the States and Mexico announced a bilateral trade deal on Monday, Canada has yet to secure its place. Representatives from the Canadian and U.S. governments worked deep into the night Thursday to devise an alternative to the trade agreement, though Canada's trade minister said they are still working to "get the right deal, not any deal," according to Reuters. Trade concerns continued to weigh on investor sentiment this week following a report that the Trump administration remains committed to imposing tariffs on an additional $200 billion worth of Chinese goods as soon as next week. President Donald Trump appeared to confirm the Bloomberg News report later Thursday, adding that he may remove the U.S. from the World Trade Organization (WTO). Trade-sensitive stocks such as Boeing and Caterpillar hit their session lows Thursday following the report. Shares of Boeing and Caterpillar dropped 0.9 percent and 2 percent in the prior session, respectively. On the data front, the latest Chicago purchasing managers index (PMI) figures are due out at 9:45 a.m. ET Friday, followed by consumer sentiment at 10 a.m. ET. Asia markets were largely down on Friday afternoon as Wall Street ended its four-day winning streak in the last session, following a report that U.S. President Donald Trump voiced his support for moving forward with more proposed tariffs. The Nikkei 225 recovered from some of its earlier losses to end the week largely flat at 22,865.15 even though most sectors slipped. South Korea's Kospi bucked the trend by closing up 0.67 percent to 2,322.88. Over in the Greater China region, markets continued their downtrend from the past few days. The Shanghai composite ended the trading week down by 0.46 percent to 2,725.24, while the Shenzhen composite closed lower by around 1.08 percent to 1,451.38. Hong Kong's Hang Seng index was down by 1.15 percent as of 3:20 p.m. Oil prices slipped but remained near $70 a barrel on Friday as impending U.S. sanctions on Iran and falling Venezuelan output offset concerns over the impact of a global trade war. Benchmark Brent crude oil was down 33 cents a barrel at $77.44 by 8:29 a.m. ET (1229 GMT). U.S. light crude was 24 cents lower at $70.01. Gold rose on Friday as investors hedged against risks stemming from the ongoing trade dispute, with $1,200 acting as a strong support, but the bullion was headed for its longest monthly losing streak since 2013. Spot gold was up 0.6 percent at $1,207.06 an ounce at 0706 GMT, after touching a near one-week low of $1,195.95 on Thursday. Prices are down 1.3 percent so far this month, on track for a fifth straight monthly decline. U.S. gold futures were up 0.7 percent at $1,212.80 an ounce.