Tuesday July 30th

30-07-2019

Dow futures fall 100 points after Trump attack on China dampens hope of a trade deal

U.S. stock index futures fell on Tuesday after President Donald Trump renewed his attacks on China, decreasing hope the two largest world economies will reach a trade deal. At around 7:43 a.m. ET, Dow Jones Industrial Average futures fell by 100 points, pointing to a loss of around 90 points at the open. S&P 500 and Nasdaq 100 futures also slid. Trump said in a series of tweets Tuesday that China is not keeping its promise of buying more U.S. agricultural products, adding: “China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product now - no signs that they are doing so. That is the problem with China, they just don’t come through.” However, China insists it has bought U.S. agricultural products. China and the U.S. agreed to restart trade talks late last month after they fell through in May. The two countries have been engaged in a trade war since last year. In that time, they’ve slapped tariffs on billions of dollars worth of each other’s goods. Traders are  also focused on the upcoming Federal Reserve meeting, which starts Tuesday. Market expectations point to a quarter-point rate cut on Wednesday, which would be the first rate cut in a decade. On the data front, there will be personal and consumer spending figures out at 8:30 a.m. ET; as well as pending home sales and consumer confidence numbers due at 10:00 a.m. ET. Wall Street ended on a mixed note Monday as investors monitored a new round of trade talks between the U.S. and China and weighed the upcoming Fed decision. Stocks in Asia Pacific edged up on Tuesday as investors awaited developments from U.S.-China trade talks this week in Shanghai. The Bank of Japan also opted to keep monetary policy steady. The Nikkei 225 in Japan rose 0.43% to close at 21,709.31. The Topix index added 0.45% to finish its trading day at 1,575.58. Over in mainland China, the Shanghai composite added 0.39% to close at 2,952.34, while the Shenzhen component rose 0.48% to finish its trading day at 9,399.10. The Shenzhen composite gained 0.452% to close at 1,582.07. Hong Kong’s Hang Seng index pared losses from Monday to bounce back in early trade following yesterday’s press conference, when Beijing reiterated their firm support for the city’s embattled leader Carrie Lam amid protests over an extradition bill. It also suggested there will not be a change in its management of Hong Kong in the near future. The index was up 0.24%, as of its final hour of trading. In South Korea, the Kospi rose 0.45% to close at 2,038.68 following a slump on Monday. Gold prices firmed on Tuesday ahead of a meeting of the U.S. Federal Reserve where it is expected to signal how big an interest rate cut the world’s biggest economy could take. Oil prices rose for a fourth day on Tuesday on optimism the U.S. Federal Reserve will this week cut interest rates for the first time in more than 10 years, supporting fuel consumption in the world’s biggest oil user. Brent crude rose 63 cents to $64.34 a barrel by 1127 GMT. It is set for a monthly fall of more than 3%, however, due to lingering worries about oil demand. U.S. crude was up 46 cents at $57.33 a barrel, but also set for a monthly decrease of around 1.8%. Spot gold was up 0.17% to $1,429.17 per ounce . U.S. gold futures were up 0.61% at $1,429.1 per ounce. “The big question is what the tone of the Fed will be tomorrow. Interest rates are overwhelmingly likely to be cut. It’s just a question of by how much,” said Mitsubishi analyst Jonathan Butler. “Gold is still at 6-year highs. Although it has been close to $1,450 recently, it seems to have found a level around $1,425.”