Thursday October 3rd

3-10-2019

Stock futures fall, pointing to a third day of losses as traders fear economy is slowing

U.S. stock index futures pointed on Thursday to a lower open as investors fretted over the state of the U.S. economy ahead of the release of key data later in the day. Dow Jones Industrial Average indicated a loss of 71 points at the open. S&P 500 and Nasdaq 100 futures also pointed to declines at the start of Thursday’s session. The Institute for Supply Management is scheduled to release its nonmanufacturing index reading for September at 10 a.m. Earlier in the week, ISM posted its weakest reading on the manufacturing sector in more than 10 years, sparking fears of an economic recession. Those fears led the Dow to lose more than 800 points over the last two sessions after losing nearly 500 points on Wednesday. Some market experts have suggested that the protracted trade war between the U.S. and China is beginning to impact growth. Delegations from Washington and Beijing are due to meet next week in the hope of finding a consensus. In other trade news, the White House plans to widen its combative trade policy with 10% tariffs on European-made Airbus planes and 25% duties on French wine, Scotch and Irish whiskies, along with cheese from across the continent. The move comes after the World Trade Organization ruled in favor of the tariffs after years of wrangling over European government subsidies for aircraft maker Airbus. The EU has suggested it will retaliate against U.S. tariffs. In corporate news, Tesla deliveries missed Wall Street estimates on Wednesday, sending its shares nearly 5% lower in trading after the bell. PepsiCo and Constellation Brands will report earnings before the bell, with Costco reporting after the session’s close. Federal Reserve Vice Chair Randal Quarles is set to deliver a speech at 8:30 a.m. ET to the European Banking Federation Summit in Brussels. Stocks in Asia fell on Thursday amid fresh trade concerns, with the U.S. announcing it’s set to slap tariffs on European Union goods. The Nikkei 225 in Japan fell 2.01% to close at 21,341.74. The Topix index also slipped 1.72% to finish its trading day at 1,568.87. Hong Kong’s Hang Seng index bucked the overall trend regionally as it rose 0.26% to close at 26,110.31. Markets in China and South Korea were closed on Thursday for holidays. Oil held steady under $58 a barrel on Thursday, kept in check by concerns about global economic growth, oil demand and signs of excess supply despite OPEC-led cuts. Euro zone business growth stalled in September, a survey on Thursday showed, a day after the U.S. announced import tariffs on European Union products. U.S. crude inventories rose 3.1 million barrels last week, more than forecast. “It is simply impossible to predict where the next significant price support will come from as the focus is firmly on economic developments,” said Tamas Varga of oil broker PVM. “And those are anything but optimistic,” he added. Brent crude oil futures rose 3 cents to $57.72 a barrel, after tumbling 2% in the previous session. U.S. West Texas Intermediate (WTI) crude rose 2 cents to $52.66. Gold steadied near $1,500 on Thursday, having risen more than 1% in the previous session after the United States announced tariffs on European goods creating more uncertainty for the global economic outlook. Spot gold was little changed at $1,499.71 per ounce, while U.S. gold futures were down 0.2% at $1,505.50 per ounce.