Dow Futures and Global Stocks Fall as China Data, Italy Election Rattle Bulls
US stock futures plunged Friday, picking up profits from the best Wall Street rally for at least two months yesterday, as investors reacted to yet another round of bleak economic data from China and a report suggesting Washington could suspend licenses for US companies looking to do business with Huawei Technologies.
The sentiment was further harmed by the potential for new elections in Italy, where one side of the country's fragile coalition government, led by the Conservative League Party, has asked Prime Minister Giuseppe Conte to dissolve parliament and call for fresh polls in September for Europe's third largest economy.
Bloomberg reported Friday that the White House is preparing to postpone the granting of licenses to US firms seeking to do business with China-backed Huawei, the world's largest handset marker, which owns China's decision to suspend U.S. agricultural purchases. The report came just ahead of data showing that Chinese factory export prices fell for the first time in three years last month, suggesting that companies must cut prices to cope with slowing exports and rising tariffs on US markets.
China also pegged its yuan north of the $ 7 mark for the second consecutive session this morning, allowing it to trade past the psychological import market for the seventh consecutive day, risking further honor from President Donald Trump, who only yesterday renewed its criticism of the Federal Reserve and complained about the strength of the US dollar in international currency markets.
The Yen traded at an 8-month high of 1[ads1]05.50 against the greenback in day trading, although the Nikkei 225 was able to eke out a modest 0.44% gain on the session, while the broader MSCI Asia ex-Japan -the reference lubricated 0.06% to the last trading hours.
US stock futures returned previous gains following the Bloomberg report on Huawei, with contracts related to the Dow Jones Industrial Average now suggesting a 140-point opening clock decline for the 30-share average, while those linked to the S&P 500 indicate a 22-point slide for wider benchmark.
Uber Technologies (UBER) shares were a remarkable early market operator, falling more than 7% after the world's largest tourism suffered a greater than expected loss of $ 5.24 billion in the second quarter, warning that more red ink followed in the months ahead.
European equities were weaker across the board, too, with Italy's FTSE MIB index falling 2.4% after league leader Matteo Salvini's declaration that the coalition government had collapsed while Germany's trade-sensitive DAX index became marked 1.1% lower on both the Huawei report and the fall in China's factory port prices.
The UK's FTSE 100 was seen 0.25% lower in London, leading to the downside of basic resource stocks, even as the pound fell to 1.2090 against the dollar after the UK economy contracted for the first time in seven years last quarter as the impact of the country's decision to leave the EU, and the government's threat to do so without a trade agreement, also for it. "
Except for equities, the global government bond yields resumed during a day trading as the risk sentiment faded and pulled the benchmark portfolio of 10-year US government bonds to 1.697%. The dollar index, which tracks the greenback against a basket of six global currencies, was seen 0 , 1% lower at 97.50 in early European trading.
Gold prices remained near the $ 1500 dollar mark, following a 4.6% weekly increase marking the best week of more than three years, with the bullion's annual date gain of 17% topping the dollar return for the S&P 500.
The global oil price rose modestly in overnight trade, but remains in bear market territory after Saudi Arabia said it would limit exports to less than 7 million barrels per day for this month and the next time to balance world markets that have suffered from oversupply due to record high US production rates and weakened demand.
Br Ent commodity supply contracts in October, the global benchmark index, were seen 84 cents higher from Thursday's close and changing hands to $ 58.22 per barrel while September's WTI contracts, which are more closely linked to US gas prices, were marked 71 cents higher $ 53.25 a barrel.
