Wednesday November 20th

20-11-2019

US stocks set to fall amid rising worries around trade

U.S. stock index futures were lower Wednesday as worries over U.S.-China trade relations dampened sentiment around a record-setting rally. Around 7:10 a.m. ET, Dow Jones Industrial Average futures indicated a loss of 79 points at the open. Futures on the S&P 500 and Nasdaq 100 were also pointing to a lower open. The Wall Street Journal reported, citing former Trump administration officials, that the ongoing trade talks could hit an impasse that would derail a so-called phase one trade deal. Uncertainty around trade also grew after the Senate passed a bill supporting Hong Kong protesters. This led China to accuse the U.S. of interfering in domestic affairs. The news follows President Donald Trump saying on Tuesday he would impose higher tariffs on Chinese goods if Beijing does not make a deal on trade. “If we don’t make a deal with China, I’ll just raise the tariffs even higher,” Trump said at a Cabinet meeting. Trump will tour Apple’s manufacturing plant in Austin, Texas,on Wednesday. The Dow pulled back from record highs on Tuesday amid losses from Boeing and Home Depot while investors monitored earnings and developments in the U.S.-China trade talks. There is lingering uncertainty among investors about the possibility of a deal between both countries, despite comments last month suggesting they were close to signing a partial agreement. Elsewhere, investors are awaiting minutes from the Federal Reserve’s October policy meeting at 2 p.m. The U.S. central bank decided to lower the federal funds rate by 25 basis points to a range of 1.5% to 1.75% late last month. In corporate news, Target shares jumped more than 8% in the premarket after the retailer posted quarterly results that easily beat expectations. Target also raised its full-year profit outlook. Asia stocks declined on Wednesday as U.S. President Donald Trump threatened to raise tariffs on Chinese goods if the two economic powerhouses do not strike a deal. Mainland Chinese stocks ended the day lower, with the Shanghai composite down 0.78% to 2,911.05 and the Shenzhen component shedding 0.82% to 9,809.05. The Shenzhen composite was around 0.707% lower at 1,635.16. Hong Kong’s Hang Seng index slipped about 0.73%, as of its final hour of trading. Elsewhere, Japan’s Nikkei 225 slipped 0.62% to close at 23,148.57 while the Topix index shed 0.33% to 1,691.11. South Korea’s Kospi shed 1.3% to close at 2,125.32. Oil prices turned positive, reversing two days of losses, despite concerns about lackluster global economic growth, as well as ebbing hopes for any movement on the U.S.-China trade war. West Texas Intermediate crude futures gained 35 cents, or 0.6%, to trade at $55.56 a barrel. Brent crude futures were at $61.32 a barrel, up 41 cents, or 0.7%. Gold prices rose to their highest in nearly two weeks on Wednesday as U.S. Senate measures on Hong Kong posed a potential roadblock for a trade deal between the United States and China, denting appeal for riskier assets. Spot gold was up 0.3% at $1,476.50 an ounce and U.S. gold futures rose 0.2% to $1,477.