Aug 16, 2019

Dow Futures I U.S. Markets: Dow futures jump 250 points after another wild week

Yun Li

Stocks were set to open sharply higher Friday, resuming its rebound from the massive sell-off earlier in the week, as Wall Street nears the end of another tumultuous week. A rebound in Treasury yields from historic lows also eased recession fears.
Futures of the Dow Jones Industrial Average indicated a positive open of about 250 points. Futures on the S&P 500 and Nasdaq Composite were also both solidly higher.
Markets closed Thursday’s session on a more positive note, boosted by retail giant Walmart’s strong earnings and solid retail sales figures. The Dow ended its volatile trading up almost 100 points after suffering its worst day of the year on Wednesday.
The U.S.- China trade war is still a big driver of market movements. President Donald Trump this week decided to delay some of the latest China tariffs to December, a move designed to avoid any negative impact on the holiday shopping season. The president also confirmed the two sides will hold talks next month.
“September, the meeting is still on as I understand it, but I think more importantly than September, we’re talking by phone, and we’re having very productive talks,” Trump told reporters on Thursday.
His comments came after Beijing promised it would counter the latest tariffs on $300 billion of Chinese goods but urged the U.S. to meet halfway in order to secure an agreement.
Chip maker Nvidia’s stock jumped 6% in premarket on Friday after it reported better-than-expected fiscal-second quarter earnings.
General Electric, which had its worst day in 11 years Thursday on Madoff whistleblower’s fraud claim, is set to rebound on Friday after CEO Larry Culp called the accusation “market manipulation” and bought nearly $2 million worth of the company’s stock. Shares of GE rose nearly 3% in premarket.
Major stock averages are set to post their third straight weekly losses with the Dow down 2.7% on the week. The S&P 500 also bled 2.4% through Thursday. August has been a volatile and brutal month for the stock market as the Dow has lost 4.5% so far, on track for its worst month since May.
The Dow lost 800 points or 3% on Wednesday, triggered by a recession warning from the bond market. The yield on the benchmark 10-year Treasury note briefly broke below the 2-year rate. The inversion of this key part of the yield curve has been a reliable indicator of economic recessions.
The U.S. 30-year Treasury yield dropped to a record low on Thursday, while the yield on the benchmark 10-year notes dipped to a three-year low, as investors sought out safe-haven assets.
Speaking to CNBC in Asia, Ray Dalio, founder of the world’s largest hedge fund, said that there’s a 40% chance that the U.S. will experience a recession before the 2020 election.
On the data front, a reading on housing starts and building permits is due at 8:30 a.m. ET. Consumer sentiment numbers will be released at 10 a.m. ET. And OPEC is also expected to publish its monthly report.
— CNBC’s Silvia Amaro contributed reporting

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