Friday June 15th

15-06-2018

Dow futures tumble 200 points as Trump says US will slap tariff on up to $50 billion in Chinese goods

U.S. stock index futures fell on Friday after the Trump administration said it will impose a 25 percent charge on up to $50 billion in Chinese goods. Dow Jones industrial average futures were down 200 points at of 8:29 a.m. ET, indicating a negative open of 178.31 points. Nasdaq 100 and the S&P 500 futures also indicated a downbeat start to the session for their respective markets. In a statement Friday, President Donald Trump said the measures would affect Chinese goods "that contain industrially significant technologies," without specifying those products. He added that the action comes "in light of China's theft of intellectual property and technology and its other unfair trade practices." Trump also said the U.S. would impose more tariffs on Chinese goods if China retaliates with duties of its own on American products. Tensions between the U.S. and several of its key trading partners have been simmering recently as the Trump administration tries to fight trade practices or deals it thinks are unfair to the U.S. Looking at markets overseas, European stocks came under pressure, while Asian-Pacific markets finished on a relatively mixed to lower note. The Nikkei 225 rose 0.5 percent, or 113.14 points, to close at 22,851.75, paring some of its more than 200-point decline in the last session. In South Korea, the Kospi declined 0.8 percent to finish at 2,404.04, extending declines made during Thursday's sell-off. Investors in greater China, meanwhile, braced for tariffs the Trump administration is expected to unveil during U.S. hours on Friday. Hong Kong's Hang Seng Index saw slim declines, slipping by 0.15 percent by 3:00 p.m. Mainland markets took a hit: The benchmark Shanghai compositedeclined 0.7 percent to close at 3,022.93, but was off its intraday low. The smaller Shenzhen composite fell 1.76 percent to end at 1,691.65. The moves in premarket trade come after U.S. markets finished the previous day's trading on a mixed note. The Nasdaq composite hit an all-time high during Thursday's session, with the S&P 500 also closing in the black. The Dow however failed to hold onto gains. Friday also marks Quadruple Witching Day, where volatility is likely as stock index futures, stock index options, stock options, and single-stock futures expire. Oil prices fell on Friday ahead of an OPEC meeting in Vienna next week as two of the world's biggest producers, Saudi Arabia and Russia, indicated they were prepared to increase output. Benchmark Brent crude oil was down 55 cents at $75.39 a barrel by 8:39 a.m. ET (1239 GMT), after falling 80 cents on Thursday. U.S. light crude was 19 cents lower at $66.70. Both contracts hit 3½-year highs in May, but have since drifted lower as U.S. crude production has risen and as the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies look poised to increase output in their meeting in the Austrian capital on June 22-23. Gold prices drifted down on Friday on profit-taking after the dollar hit a seven-month peak, but got support from investors skittish about prospects of a trade war and a correction in equity markets. Gold briefly touched a one-month peak on Thursday after the European Central Bank said it would hold off on interest rate hikes, but an accompanying surge in the dollar knocked back bullion. "The dollar has been waking up to some renewed strength and that's largely been held onto today," said Jonathan Butler, commodities analyst at Mitsubishi in London. "Gold is stuck in a range on either side of $1,300 with no major catalyst to break out on either side." Spot gold was down 0.6 percent at $1,294.07 per ounce, after reaching its highest since May 15 at $1,309.30 an ounce on Thursday. U.S. gold futures for August delivery fell 0.9 percent at $1,296.80 per ounce.