Wednesday May 15th

15-05-2019

Dow futures fall 150 points after disappointing retail sales data

U.S. stock index futures fell on Wednesday after the release of weak economic data out of the U.S. and China data stoked worries that the global economy is slowing down. At around 8:40 a.m. ET, Dow Jones Industrial Average futures fell 157 points, indicating a loss of 107 points at the open. S&P 500 and Nasdaq 100 futures also pointed to a lower open. U.S. retail sales fell 0.2% in April, the Commerce Department said Wednesday. Economists polled by Dow Jones expected an increase of 0.2%. Stock futures fell to their session lows following the data release. Overnight, data released in China showed industrial production by 5.4% in April on a year-over-year basis, notching the slowest pace of growth since May 2003. Economists polled by Refinitiv expected an expansion of 6.5%. The disappointing data from both countries comes as trade tensions between China and the U.S. have reignited. Earlier this week, China hiked tariffs on $60 billion worth of U.S. goods. The move came after the U.S. raised levies on $200 billion worth of Chinese imports. The U.S. also raised the possibility of slapping tariffs on an additional $300 billion in goods from China. President Donald Trump tweeted on Tuesday that the U.S. is in a “much better position now than any deal we could have made.” The rising trade fears sent equities reeling to start off the week as the major indexes all fell more than 2% on Monday. Stocks rebounded on Tuesday, with the Dow posting its best day in a month. Nonetheless, trade will remain a key focus for market participants. The U.S. president has until midnight Friday to decide whether to impose car tariffs on Europe. Shares in Asia were higher on Wednesday following an earlier slump this week as trade tensions between the U.S. and China escalated. Mainland Chinese shares advanced on the day, with the Shanghai compositeadding 1.91% to 2,938.68 and the Shenzhen component rising 1.45% to 9,169.15. The Shenzhen composite also gained 2.325% to 1,577.92. In Hong Kong, the Hang Seng index added 0.73%. Japan’s Nikkei 225 rose 0.58% to close at 21,188.56, while the Topix index added 0.60% to finish its trading day at 1,544.15. In South Korea, the Kospi rose 0.53% to close at 2,092.78. Oil prices fell on Wednesday after data showed a surprise rise in U.S. crude inventories and the U.S.-Chinese trade dispute threatened demand, although Middle East tensions capped losses. Brent crude futures fell 42 cents to $70.82 a barrel around 8:25 a.m. ET (1225 GMT). U.S. West Texas Intermediate crude futures were down 61 cents, or 1%, at $61.17 per barrel. Gold steadied on Wednesday, holding just below the key $1,300 level, as global stocks retreated, pointing to reduced appetite for riskier assets while investors awaited clarity on the U.S.-China trade front. Spot gold was up 0.1% at $1,298.26 per ounce, having hit its highest level since April 11 at $1,303.26 on Tuesday. U.S. gold futures edged 0.2% higher to $1,299.00 an ounce.