Monday March 19th

19-03-2018

US stocks set for a negative open as trade tensions resurface

U.S. stock index futures posted sharp drops ahead of Monday's open, as losses from markets overseas weighed on sentiment. Around 7 a.m. ET, Dow futures slipped 130 points. The Nasdaq and the S&P 500 futures also indicated a negative open for their respective markets. In the previous trading session Friday, Wall Street closed flat to higher, but on the week, stocks posted a loss due to concerns over a potential trade war and turmoil within the U.S. administration. Stocks in Asia and Europe posted losses during their respective Monday trading sessions, with concerns of a possible trade war. Japan's Nikkei 225 recorded steeper losses as the session wore on, with the index declining 0.9 percent, or 195.61 points, to close at 21,480.90. Meanwhile, South Korea's benchmark Kospi index slid 0.76 percent to end at 2,475.03. Market sentiment in greater China markets told a different story, with the Hang Seng Index edging up by 0.16 percent by 3:00 p.m. HK/SIN as declines in property developers were offset by gains in financials. The Shanghai composite tacked on 0.3 percent to finish at 3,279.60 and the Shenzhen composite added 0.27 percent to close at 1,868.05. The start-up ChiNext board rose 1.2 percent, besting the 0.44 percent gain seen on the large cap CSI 300 index, with health care stocks leading the move higher. Forty-five U.S. trade associations — which represent some of the biggest firms in the country — have urged President Donald Trump to not inflict tariffs on China, stating in a letter that this would likely be "particularly harmful" to both U.S. consumers and the economy, according to Reuters. Earlier this month, Trump had tweeted that he'd asked China for a plan to cut down the trade deficit between the U.S. and China by $1 billion dollars. G-20 financial leaders are due to meet in Argentina on Monday, where trade will likely be top of the agenda. Investors are looking ahead to Wednesday's Federal Open Market Committee (FOMC) meeting — which will be headed up by newly-appointed Chair Jerome Powell. The central bank is expected to raise interest rates for the first time in 2018. The quarterly financial report is due out at 10 a.m. ET, while in corporate earnings, Cheetah Mobile and Oracle are due to report. Two bills auctions and one bills announcement are scheduled to take place Monday. Oil prices fell on Monday as increased drilling in the United States pointed to more output, raising concerns about a return of oversupply. U.S. West Texas Intermediate (WTI) crude futures were down 32 cents at $62.02 a barrel at 7:42 a.m. ET (1142 GMT). Brent crude futures were at $66 per barrel, down 21 cents. Gold touched its lowest in more than two weeks on Monday as markets remained nervous ahead of a U.S. central bank meeting that could raise interest rates and signal three more increases this year. The price of gold has bounced after each of the five previous U.S. rate hikes and is expected to again, said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. "We have plenty of geopolitical risks and uncertainty, which continue to provide support, and once the rate hike's out of the way the market will return its attention to whether Washington is moving further towards protectionism and trade wars, which could lead to lower growth," he said. Spot gold, which fell for a fourth straight session, was down 0.16 percent at $1,311.51 an ounce at 8:46 a.m. EST. It earlier dropped to $1,307.51, its lowest since March 1. U.S. gold futures for April delivery eased by 0.08 percent to $1,311.30.