Friday May 17th

17-05-2019

US stock futures pare losses after Trump delays auto tariffs by 6 months

U.S. stock index futures regained some of their earlier losses on Friday after the Trump administration announced the delay of auto tariffs by six months. At 8:40 a.m. ET, Dow Jones Industrial Average futures indicated a drop of 172 points at the open. Futures for the S&P 500 and Nasdaq 100 also fell. Dow futures indicated a drop of more than 200 points prior to the announcement. Futures fell as trade tensions between the U.S. and China continue to dominate investor sentiment. Chinese Commerce Ministry spokesman Gao Feng said Thursday, according to state-run news agency Xinhua, that the U.S. is exhibiting “bullying behavior” with its latest moves on the trade front, noting it is “regrettable that the U.S. side unilaterally escalated trade disputes, which resulted in severe negotiating setbacks.” The U.S. hiked tariffs on $200 billion worth of Chinese goods last week while China retaliated Monday with higher levies on $60 billion worth of U.S. products. The moves led to a massive sell-off to start off the week. But the major indexes have clawed back most of their losses through Thursday’s close. President Donald Trump’s administration then moved to make it harder for U.S. companies to do business with Huawei, a giant telecommunications company in China. Shares of U.S. suppliers like Qualcomm, Qorvo and Micron Technology fell 1.9%, 1.6% and 1.4%, respectively. Chinese stocks fell sharply overnight. The Shanghai Composite dropped 2.5% and posted its longest weekly losing streak since July 2018. Hong Kong’s Hang Seng index also declined more than 1%, as of its final hour of trading. The Nikkei 225 in Japan added 0.89% to close at 21,250.09, while the Topix index rose 1.09% to finish at 1,554.25. In South Korea, the Kospi slipped 0.58% to close at 2,055.80. Investors also fretted over a breakdown in Brexit talks. The U.K.’s two largest political parties failed to strike a deal on the country’s exit from the European Union after six weeks of talks. Jeremy Corbyn, the Labour Party leader, told Prime Minister Theresa May that talks had “gone as far as they can go. ” Sterling fell 0.4% to $1.2751. Stocks posted solid gains on Thursday, largely driven by strong earnings from Walmart and Cisco Systems, as the major indexes notched their third consecutive gain. On the data front Friday, consumer sentiment numbers are due at 10 a.m. ET. Meanwhile, Deere is set to report its earnings before the bell. Oil prices were steady on Friday, giving up earlier gains, and were on track for the first weekly increases this month, as rising tensions in the Middle East stoked fears of supply disruptions. Brent crude futures were at $72.61 a barrel at 0658 GMT, down 1 cent, from their last close, reversing earlier increases. Brent was up 2.9% for the week, on track for its first gain in three weeks. U.S. West Texas Intermediate (WTI) crude futures were at $63.95 per barrel, up 8 cents. WTI was headed for a weekly gain of 2.1%, the first rise in four weeks. Gold price were mostly unchanged on Friday after a steep fall in the previous session, with gains curbed by a firmer dollar and a pullback in global equities on U.S.-China trade tensions offering support. Spot gold was steady at $1,285.67 per ounce. U.S. gold futures were little changed at $1,285.80 an ounce.