Tuesday June 26th

26-06-2018

Stocks set for flat open as trade confusion keeps Wall Street in check

U.S. stock index futures pointed to a flat open on Tuesday as mixed messages from the Trump administration kept investors in check. Treasury Secretary Steven Mnuchin said in a tweet Monday that a report from the Wall Street Journal about the Trump administration planning to curb Chinese investment in U.S. tech was “fake news.” Mnuchin added, however, that those restrictions will apply to “all countries that are trying to steal our technology.” Later on Monday, Peter Navarro, a trade advisor to President Donald Trump, told CNBC said there were no plans on slapping investment restrictions on China or other countries. He also called the stock market was overreacting to such fears. However, White House press secretary Sarah Sanders doubled down on Mnuchin’s statement, saying in a press briefing: “As the Secretary said, a statement would go out that targets all countries that are trying to steal our technology, and we expect that to be out soon.” Stocks fell sharply on Monday, with the Dow dropping more than 300 points and the S&P 500 sliding 1.4 percent, its biggest one-day decline since April 6. Harley-Davidson declined almost 6 percent on Monday after announcing it will shift production of motorcycles headed for Europe to factories outside the U.S. Trump went after the motorcycle maker on Tuesday, saying in a tweet "they won’t be able to sell back into U.S. without paying a big tax. General Electric shares jumped more than 5 percent in the premarket after the company revealed a plan to spin off its health-care business and sell its stake in Baker Hughes. The company also announced it will maintain its current dividend until the spin-off is complete. GE was also replaced by Walgreens Boots Alliance on the Dow. Asian markets closed mostly lower on Tuesday as investors weighed an escalating trade dispute between the U.S. and China. Japan's Nikkei 225 was little changed, closing higher by 0.02 percent, or 3.85 points, at 22,342 after falling as low as 22,104.12. Greater China markets recovered slightly after stumbling in the morning, although the benchmark Shanghai composite remained in negative territory. The benchmark tracked lower by 0.51 percent to close at 2,844.66 after trading lower by more than 1 percent in the morning. The smaller Shenzhen composite turned positive, ending the session up 0.56 percent. Over in Hong Kong, the Hang Seng Index was flat by 3:15 p.m. Other major markets in Asia also put in poor showings, with South Korea's Kospi shedding 0.3 percent to close at 2,350.92 and Australia's S&P/ASX 200 edging down by 0.21 percent to 6,197.10. Oil prices rose on Tuesday, supported by Canadian production losses and uncertainty over Libyan exports, but under pressure from climbing OPEC supply and intensifying trade conflicts between the United States and other major economies. Benchmark Brent crude was up 35 cents at $75.08 a barrel by 0910 GMT. U.S. light crude was 30 cents higher at $68.38 a barrel. Gold prices fell to a more than six-month low on Tuesday, pressured by prospects of rising U.S. interest rates amid a strengthening economy. Spot gold was down 0.7 percent at $1,256.18, its weakest since Dec. 18, 2017. U.S. gold futures for August delivery were 0.86 percent lower at $1,258.