Tuesday September 11th

11-09-2018

Dow set to drop 100 points as investors fret about global trade

U.S. stock index futures fell ahead of Tuesday's open as worries about global trade keep investors on edge. Around 7:30 a.m. ET, Dow Jones Industrial Average futures dropped 132 points, indicating a decline of 100.07 points at the open, while S&P 500 and Nasdaq 100 futures also pointed to a downbeat open. Last Friday, President Donald Trump said he was "ready to go" on hitting China with an additional $267 billion worth of tariffs. The U.S. administration had already previously announced that it would impose tariffs on $200 billion in Chinese goods.Consequently, investors will be keeping abreast of this issue to see if more developments emerge. China is reportedly set to call upon the World Trade Organization soon for authorization to inflict sanctions on the U.S., according to a meeting agenda, Reuters reported. The reason for this is because of Washington's non-compliance with a ruling in a dispute over U.S. dumping duties that China introduced in 2013. Boeing shares, considered a bellwether for global trade, fell 0.6 percent before the bell. Caterpillar also slipped 0.7 percent. Stock futures also fell as tech was headed for another decline. Shares of Facebook, Amazon, Netflix and Tesla all fell in the premarket. Tesla's stock dropped 2 percent after a Nomura analyst called the stock "no longer investable." Elsewhere, North Korea has come back onto the agenda, after news emerged that Trump had received what The White House dubbed a "very warm, very positive letter" from Kim Jong Un, who called for a follow-up meeting with the U.S. president. Both leaders met in Singapore in June to discuss denuclearization and the future of the two nations' relationship. In data, investors will be paying close attention to the job openings and labor turnover survey (JOLTS), following last week's nonfarm payrolls. JOLTS are due out at 10 a.m. ET. Overseas, markets in Asia were mostly mixed, while stocks in Europe came under slight pressure in early trade. In the Greater China markets, Hong Kong's Hang Seng index closed lower by 0.71 percent at 26,425.56 as the market remained in bear territory for the second day after dropping by more than 20 percent from its highs in January 2018. Over on the mainland, the Shanghai composite lost its earlier gains to close 0.18 percent lower at around 2,664.80 while the Shenzhen composite climbed 0.172 percent to end at approximately 1,409.34. The Nikkei 225 extended its gains to end the trading day up by 1.3 percent at 22,664.69. South Korea's Kospi, on the other hand, closed 0.24 percent lower at 2,283.2. Oil prices rose on Tuesday as U.S. sanctions squeezed Iranian crude exports, tightening global supply despite efforts by Washington to get other producers to increase output. Brent crude oil was up 51 cents at $77.88 a barrel. U.S. light crudewas up 16 cents at $67.71. Gold prices held steady during Asian trade on Tuesday as investors remained on the sidelines amid expectations of a U.S. interest rate hike this month and on fears of an escalation in the Sino-U.S. trade war. Spot gold was mostly unchanged at $1,195.79 an ounce at 0654 GMT. U.S. gold futures rose 0.1 percent to $1,201.60.