Wednesday June 12th

12-06-2019

Stock futures dip as June rally pauses

U.S. stock index futures slipped on Wednesday as Wall Street took a pause following a strong rally to kick off June. Around 7:15 a.m. ET, Dow Jones Industrial Average futures indicated a loss of 53 points at the open. Futures on the S&P 500 and Nasdaq 100 also fell. Wednesday’s declines come after muted trading action in the previous session. The Dow closed marginally lower, snapping a six-day winning streak. Still, the major indexes were all up nearly 5% for the month, rebounding from a sharp sell-off in May as U.S.-Mexico trade worries were quelled while expectations for looser monetary policy increased. Market focus remained largely attuned to global trade developments on Wednesday, after President Donald Trump said Tuesday that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agreed on as many as five “major points.” Trump did not specify these trade issues. Washington and Beijing have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment. The Labor Department said on Wednesday its consumer price index edged up 0.1% last month. The CPI gained 0.3% in April. In the 12 months through May, the CPI increased 1.8%, slowing from April’s 1.9% gain. Economists polled by Reuters had forecast the CPI would rise 0.1% in May and 1.9% year-on-year. Excluding the volatile food and energy components, the CPI nudged up 0.1% for the fourth straight month. The latest Federal Budget figures will be released slightly later in the session. Shares in Asia Pacific declined on Wednesday following an overnight trading session on Wall Street that saw the end of the Dow Jones Industrial Average’swinning streak. Mainland Chinese shares slipped on the day, with the Shanghai compositedeclining 0.56% to close at 2,909.38 and the Shenzhen component shedding 0.92% to end its trading day at 8,954.72. The Shenzhen composite also fell 0.639% to close at 1,528.40. Hong Kong’s Hang Seng index dropped more than 1.7%, as of its final hour of trade. Elsewhere, the Nikkei 225 in Japan slipped 0.35% to close at 21,129.72.The Topix index also fell 0.45% to finish its trading day at 1,554.22. Over in South Korea, the Kospi slipped 0.14% to close at 2,108.75. Oil prices sank on Wednesday following a report of another rise in U.S. crude stockpiles and as the market continues to grapple with concerns about fuel demand. U.S. commercial crude inventories rose by 4.9 million barrels in the week through June 7, according to the American Petroleum Institute, an industry group. Analysts in a Reuters poll had expected stockpiles to fall by 481,000 barrels. Traders are now waiting for confirmation when the U.S. Energy Information Administration releases official government figures at 10:30 a.m. ET. Last week, crude futures fell to a nearly five-month low after EIA figures showed crude stocks surged to the highest level since July 2017. Brent crude, the international benchmark for oil prices, was down $1.54, or 2.5%, at $60.75 around 8:35 a.m. ET (1235 GMT). Brent hit a session low at $60.30 in early morning trading. U.S. West Texas Intermediate crude futures fell $1.44, or 2.7%, to $51.83 per barrel. WTI fell as low as $51.46 earlier in the session. Gold prices gained on Wednesday after hitting a one-week low in the previous session, as fears of escalating U.S.-China trade tensions curbed risk appetite and increased the appeal of safe-haven bullion. Spot gold was up 0.8% at $1,337.72 per ounce as of 0941 GMT, its biggest one-day percentage gain since June 3, after falling as low as $1,319.35 on Tuesday. U.S. gold futures were up 0.7% at $1,340.4 an ounce.