Friday September 7th

7-09-2018

US stock futures slip as trade fears rise

U.S. stock index futures fell on Friday amid increasing trade fears as the prospects of striking deals with China appear to be fading. Investors also digested the release of monthly employment data. Around 8:30 a.m. ET, Dow Jones Industrial Average futures slipped 75 points, indicating a decline of 59.87 points at the open, with S&P 500 and Nasdaq 100 futures also pointing to a relatively negative start to the day. Markets in Asia and Europe were mostly lower Friday. The Wall Street Journal reported, citing U.S. officials, that the possibility of the U.S. and China reaching a trade deal are fading as the Trump administration tries to revamp the North America Free Trade Agreement (NAFTA). Meanwhile, Bloomberg News reports that the U.S. and Canada will likely end the week with no trade deal in place. The U.S. administration is gearing up for a potential new round of tariffs on Chinese goods, following the end of a public comment period, which terminated Thursday midnight in Washington. Investors will be paying close attention to this story to see if any news unfolds in the coming hours or days. On Thursday, President Donald Trump hinted to a Wall Street Journal columnist that he could take his trade fights to Japan next. The news sent the dollar lower against the yen on Friday morning. Trade tensions, coupled with a meltdown in emerging markets, have pressured equities this week, knocking the S&P 500 and Nasdaq from record highs. "There are lots of uncertainties in the market right now," said Komal Sri-Kumar, president of Sri-Kumar Global Strategies. The U.S. has been largely resilient, but "there are significant storm clouds that are gathering." "When you have what is now a small part of world GDP in the U.S., and the rest of the world in turmoil, that is eventually going to hit the U.S.," Kumar said. The U.S. economy added 201,000 jobs in August, more than the expected increase of 191,000. Average hourly earnings rose 2.9 percent for the month on an annualized basis, marking the largest jump since August 2009. Treasury yields jumped to their highs of the session following the jobs report release. Asia markets were mixed on the last trading day of the week, as markets continued to watch for any possible developments on the U.S.-China trade front. The Nikkei 225 fell by 0.8 percent to close at 22,307.06. South Korea's Kospi also ended the trading week down by 0.26 percent. The Greater China stock indexes, on the other hand, largely made a turnaround in the afternoon, with Hong Kong's Hang Seng indexslightly up as of 3:10 p.m. The Shanghai composite was up by 0.4 percent to close around 2,702.30 while the Shenzhen composite ended the trading week higher by 0.105 percent at about 1,433.36. Oil prices steadied on Friday as a rise in stocks of refined petroleum products offset a big fall in U.S. crude inventories to the lowest level since 2015. Brent crude futures edged up 17 cents to $76.67 a barrel. U.S. West Texas Intermediate (WTI) crude futures was flat at $67.77 per barrel. Gold steadied on Friday as the dollar slipped versus a currency basket despite fears over looming China-U.S. trade tariffs, and as investors turned their attention to U.S. payrolls data due later. Spot gold edged up 0.1 percent to $1,201.04 as of 1020 GMT, after it hit a near one-week high on Thursday at $1,206.98, and was headed for a third straight session of gains. U.S. gold futures rose 0.2 percent to $1,206.70 an ounce.