Monday November 11th

11-11-2019

Dow set to fall more than 100 points on lingering trade worries

U.S. stock index futures were lower Monday amid lingering U.S.-China trade worries worries while protests in Hong Kong escalate. Around 7:30 a.m. ET, Dow Jones Industrial Average futures were down 118 points, indicating a loss of 136 points at the open. S&P 500 and Nasdaq 100 were also lower. These decline would knock the major averages from record levels reached last week. The Dow notched its eighth record close of the year on Friday while the S&P 500 closed at an all-time high for the 19th time. The Nasdaq, meanwhile, posted a record close for the 14th time in 2019. President Donald Trump said Friday he had not agreed to roll back tariffs on China. Those comments came after the Chinese commerce ministry said that both sides had agreed to cancel existing tariffs in phases. A U.S. official also reportedly said both sides agreed to roll back the tariffs in tranches. The stock market’s recent move to record highs comes in part because of improving sentiment around U.S.-China trade talks. With his comments on Friday, Trump dampened trade expectations in the market.  “The macro backdrop is certainly much improved from where things stood in Sept and the trade landscape is about to be the most favorable in years,” Adam Crisafulli, founder of Vital Knowledge, said in a note. “However, ‘phase one’ expectations are very elevated ... and valuations are quite stretched.” Market players are also following new demonstrations in Hong Kong. Local police opened fire at protesters, leaving one in critical condition. Separately, another protester was set aflame after being doused with an unknown substance and is also in critical condition. Hong Kong stocks fell sharply amid the protest escalation, with the Hang Seng index sliding 2.6% overnight. Asia Pacific markets saw losses throughout the region by Monday afternoon, as shares in Hong Kong tumbled amid worsening tensions in the city. Chinese mainland markets chalked up losses by the close: The Shanghai composite was down 1.83% to 2,909.07 and the Shenzhen composite declined 2.26% to 1,611.44. The Shenzhen component index lost 2.17% to 9,680.57. Japan’s Nikkei 225 reversed early gains to trade down 0.26% to close at 23,331.84 while the Topix index edged down to 1,704.03. South Korea’s Kospi fell 0.61% to close at 2,124.09 as major chipmaker SK Hynix slid 1.22%. Oil prices dipped on Monday after U.S. President Donald Trump appeared to downplay reports of an imminent lifting of tariffs in a protracted U.S.-China trade war. Brent crude was down 67 cents at $61.68. The contract gained 1.3% last week. U.S. crude was 74 cents lower at $56.50 a barrel, having risen 1.9% last week. Gold prices rose on Monday on fresh doubts over whether the United States and China can strike a trade deal, while a sluggish start to the week in equities weighed on risk appetite after protests in Hong Kong turned violent over the weekend. Spot gold prices were 0.5% higher at $1,465.47 per ounce by 1033 GMT, after slumping 3.6% last week in their worst weekly fall in three years. U.S. gold futures rose 0.3% to $1,466.40 per ounce.