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May 7, 2019

US Futures Indication | Dow futures fall more than 150 points as trade worries persist

Fred Imbert, Silvia Amaro

U.S. stock index futures were lower on Tuesday as market participants continued to monitor trade relations between the U.S. and China.
At around 7:16 a.m. ET, Dow Jones Industrial Average futures fell 161 points, indicating a drop of 163 points at the open. Futures on the S&P 500 and Nasdaq 100 were also lower.
Wall Street ended Monday’s session moderately lower after a sharp initial drop. Traders are optimistic that Beijing and Washington will reach a deal despite the latest escalation of tariffs, however continued uncertainty about the outcome of the talks continues to weigh on the markets.
“I expect that the US and China will settle their differences on trade issues sooner rather than later,” said Ed Yardeni, president and chief investment strategist at Yardeni Research, in a note. “The Trump administration seems to have concluded that it is time to get it done. In other words, it’s either deal or no deal.”
President Donald Trump announced Sunday he would raise current tariffs 10% on $200 billion of Chinese goods to 25% on Friday. In a Twitter post, he also threatened to impose an extra 25% levies on an additional $325 billion of Chinese goods “shortly.”
U.S. Trade Representative Robert Lighthizer said the tariff increase will happen. However, Treasury Secretary Steven Mnuchin said the U.S. would reconsider those levies if talks improved.
Chinese Vice Premier Liu He is expected to join a delegation in the United States this week, raising hopes of a trade agreement despite the latest round of duties. However, he will only attend the negotiations on Thursday and Friday. He was originally scheduled to attend negotiations Wednesday through Saturday.
“I remain hopeful that a deal comes and we won’t see new tariffs on Friday,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “But its clear the level of mistrust between the two sides will last for years and some of the tariffs will remain as part of the enforcement tools.”
On the data front, there is job openings and labor turnover survey (JOLTs) due at 10 a.m. ET; and consumer credit numbers due at 3 p.m. ET.

Source: CNBC

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