Friday June 14th

14-06-2019

US stock futures fall as chipmakers slide and China data disappoints

U.S. stock index futures were lower on Friday as investors digested a drop in semiconductor shares alongside weak data out of China. Dow Jones Industrial Average futures fell 50 points, indicating a loss of 54 points at the open. S&P 500 and Nasdaq 100 futures also fell. Chipmakers fell broadly after weak quarterly results from Broadcom. The VanEck Vectors Semiconductor ETF (SMH) fell more than 3% in the premarket, led by a 9.6% plunge on Broadcom. The chipmaker posted weaker-than-expected revenue for the previous quarter and cut its guidance for 2019, citing “broad-based ” demand weakness and the U.S. crackdown on Huawei. Other semiconductor stocks also fell. Micron Technology, Advanced Micro Technology and Applied Materials all traded down more than 2.5%. The tech sector also dropped broadly as the Technology Select Sector SPDR ETF (XLK) pulled back 1%. Sentiment on Wall Street was also dampened by disappointing industrial data from China. Industrial production in China rose 5% last month on a year-over-year basis, the slowest pace of growth in 17 years. Chinese shares fell overnight following the data release. The Shanghai Composite lost 1% while the Shenzhen A Shares index slid 1.8%. Over in Hong Kong, the Hang Seng index slipped 0.76% in afternoon trade as tensions remained high over a controversial extradition bill. Elsewhere, the Nikkei 225 in Japan rose 0.4% to close at 21,116.89, while the Topix added 0.34% to finish its trading day at 1,546.71. South Korea’s Kospideclined 0.37% to close at 2,095.41. The major U.S. stock indexes posted solid gains in the previous session, adding to this month’s sharp rally. The Dow, S&P 500 and Nasdaq were all up more than 5% entering Friday’s session. Reports of the death of the American consumer were greatly exaggerated as the May retail sales data rose at a healthy pace and the decline in the prior month was revised to show a gain. U.S. retail sales increased 0.5% in May, with broad-based gains, the Commerce Department said Friday. Economists polled by MarketWatch had forecast a solid 0.7% gain. There was a big rise in auto sales, but the even when that was stripped out, retail sales rose 0.5%, the government said. April sales were revised up to a 0.3% gain from the initial report of a 0.2% fall. Oil prices steadied on Friday but remained on track for a weekly loss on fears that trade disputes will dent global oil demand, though attacks on two oil tankers in the Gulf of Oman this week put a floor under prices. Brent crude futures were up 8 cents at $61.39 a barrel by 8:45 a.m. ET (1245 GMT), having gained 2.2% on Thursday. U.S. West Texas Intermediate crude futures were down 9 cents at $52.19. WTI also rose 2.2% in the previous session. Both contracts were on course to register weekly declines of about 3%. Gold hit its highest since April last year on Friday as intensifying political concerns in the Middle East and weak economic data from China and the United States pushed it above the $1,350 level. Spot gold was up 1% to $1,355.00 per ounce, after hitting its highest since April last year at $1,358.04 earlier in the session. Prices have risen 1.1% so far this week, keeping the metal on track for its fourth consecutive weekly gain. U.S. gold futures jumped 1.1% to $1,357.9 an ounce.