Monday October 7th

7-10-2019

Stock futures point to lower open with US-China trade talks set to begin this week

U.S. stock index futures were lower Monday as investors prepared for the start of U.S.-China trade talks later this week. Around 7 a.m. ET, Dow Jones Industrial Average futures indicated a loss 51 points at the open. S&P 500 and Nasdaq 100 also slightly lower. The moves in premarket trade come after a media report suggested Chinese officials were increasingly reluctant to agree to a broad trade deal pursued by President Donald Trump. Vice Premier Liu He, who will lead negotiations for China, told dignitaries that his offer to the U.S. will not include commitments on reforming Chinese industrial policy or government subsidies, Bloomberg reported Sunday, citing sources familiar with the matter. Trade talks between the U.S. and China are set to resume in Washington, D.C., on Thursday. The world’s two largest economies 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. Industrial stocks pointed to a slight decline in the premarket. The Industrial Select Sector SPDR Fund (XLI) was down 0.5% on light-volume trading, led by declines in Fastenal and Alaska Air Group. Wall Street came into Monday’s session after the Dow and S&P 500 posted their third straight weekly decline after a flurry of disappointing U.S. economic data suggested the ongoing trade war was starting to take its toll, stoking concerns of a possible recession. The Dow fell 0.9% last week while the S&P 500 slid 0.3%. However, that weak data also raised hope for easier monetary policy from the Federal Reserve. Market expectations for a rate cut later this month were around 80%, according to the CME Group’s FedWatch tool. Asia markets were mixed on Monday as investors awaited a fresh round of U.S.-China trade negotiations expected to begin later this week. Japan’s Nikkei 225 closed 0.16% lower at 21,375.25. The Topix index finished its trading day largely flat at 1,572.75. South Korea’s Kospi closed fractionally higher at 2,021.73. Markets in Hong Kong and China were closed Monday for holidays. Oil prices were up on Monday, buoyed by hopes of progress in U.S.-China trade talks and supported by challenges to supply facing major exporters. Brent crude rose 73 cents or 1.3% to $59.11 a barrel, while U.S. West Texas Intermediate (WTI) crude was at $53.65, up 84 cents or 1.6%. Gold eased on Monday as the dollar firmed after a report said China was likely reluctant to agree to a broad trade deal with Washington, but bullion held a tight range as investors took a wait-and-see approach ahead of U.S.-China talks this week. Spot gold was down 0.4% at $1,498.43 per ounce. Prices had firmed 0.5% last week on concerns of slowing global growth. U.S. gold futures slipped 0.6% to $1,504.0 per ounce.