U.S.-China trade tensions are weighing heavily on stock futures this morning
Futures on the Dow Jones Industrial Average (DJI) are signaling sharp losses as global trade tensions remain at the forefront. The Dow is set to drop over 200 points, extending Friday's steep losses after President Donald Trump announced tariffs impacting $50 billion of Chinese goods. However, July crude futures are up 0.3% at $65.26 per barrel ahead of this Thursday's OPEC meeting, after Goldman Sachs affirmed its forecast for "further declines in inventories and higher oil prices in the second half of 2018."
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5 Things You Need to Know Today
- The Chicago Board Options Exchange (CBOE) saw 1.34 million call contracts traded on Friday, compared to 826,683 put contracts. The single-session equity put/call ratio rose to 0.61, while the 21-day moving average remained at 0.57.
- Alphabet Inc (NASDAQ:GOOGL) announced a plan to invest $550 million in Chinese e-commerce concern JD.com Inc (NASDAQ:JD), sending U.S.-traded JD shares up more than 5% ahead of the bell. JD recently reclaimed a foothold above its 200-day moving average, and is on track to open at a three-month high around $45.85.
- Specialty retailer Rent-A-Center Inc (NASDAQ:RCII) will be acquired by Vintage Capital for $15 per share, or around $1.37 billion. The deal is expected to be completed by the end of 2018. RCII stock got a jolt last week from reports of the acquisition interest, and settled Friday at $12.03.
- Walt Disney Co (NYSE:DIS) is down 1.8% in pre-market trading, after Pivotal downgraded the stock to "sell" from "hold," just days after Comcast (CMCSA) bid $65 billion in cash for 21st Century Fox (FOXA) assets -- topping Disney's previous $52.4 billion offer. DIS is set to open just below its year-to-date breakeven level of $107.51.
- Today's economic calendar features the National Association of Home Builders (NAHB) housing market index, along with speeches from Atlanta Fed President Raphael Bostic and San Francisco Fed President John Williams. There are no earnings of note.
Tech, Steel Stocks Struggle in Quiet Asia Trade
It was a relatively quiet session in Asia today, as Chinese and Hong Kong trading was shuttered for holiday. The action that did take place in Japan and South Korea was to the downside, with the Nikkei and Kospi losing 0.8% and 1.2%, respectively. Some of the biggest losers were out of the tech sector, headlined by a sharp loss in Samsung Electronics, and steel stocks in Japan were also hit hard after the country posted its first trade deficit in three months in May.
Price action is also weak in Europe, where investors are expressing caution over the trade spat between the U.S. and China, along with fresh headlines suggesting German Chancellor Angela Merkel’s three-party coalition is under pressure. The German DAX has suffered the biggest pullback as a result, down 1.5% at last check. In France, the CAC 40 has shed 1.4%, and London’s FTSE 100 is down 0.4%, as traders digested U.K. economic data hinting at the slowest economic expansion since 2009.