Monday July 8th

8-07-2019

Dow set to fall 100 points at the open as tech shares slide

U.S. stock index futures fell on Monday as losses in Apple shares pressured the broader tech sector while investors braced for key testimony from the top Federal Reserve official later this week. As of 8:14 a.m. ET, Dow Jones Industrial Average futures were down 74 points, indicating a loss of 109 points at the open. S&P 500 and Nasdaq 100 futures also traded lower.  Apple shares fell more than 1% after an analyst at Rosenblatt Securities downgraded them to sell from neutral. The analyst said the stock will “face fundamental deterioration over the next 6 to 12 months ” as Apple’s iPhone sales disappoint and growth in other products slows down. Other tech shares like NetApp, Juniper Networks and Applied Materials traded lower in the premarket. Wall Street also looked ahead to testimony from Fed Chair Jerome Powell on Wednesday. Powell’s testimony comes after a stronger-than-expected jobs report raised questions about whether the Fed will cut rates later this month. Market expectations for a rate cut in July are at 100%, according to the CME Group’s FedWatch tool. The Fed opened the door for lower rates last month after saying it will “act as appropriate” to maintain the current U.S. economic expansion, which is the longest ever. “I think that this will be one of the most important weeks of Chairman Powell’s 2019 career. I think the market has expectations, like you said, of a quarter point at minimum rate cut at the end of July, yet the Fed really hasn’t concluded that that is going to occur yet,” Brett Ewing, chief market strategist of First Franklin Financial Services, told CNBC on Monday. “This is the week that either Chairman Powell needs to guide the market into what they believe they are going to do that could be different or he needs to concur with the market,” Ewing said. Stocks in Asia were lower on Monday after a strong jobs report last Friday stateside moderated expectations that the U.S. Federal Reserve could soon be making a move on interest rates. In mainland China, the Shanghai composite fell 2.58% on the day to 2,933.36, while the Shenzhen component declined 2.72% to finish its trading day at 9,186.29. The Shenzhen composite also shed 2.898% to close at 1,554.80. Hong Kong’s Hang Seng index dropped 1.66%, as of 3:15 p.m. In Japan, the Nikkei 225 slipped 0.98% to end its trading day at 21,534.35, while the Topix index shed 0.89% to close at 1,578.40. Over in South Korea, the Kospi dropped 2.2% to close at 2,064.17. Crude prices edged higher on Monday, supported by last week’s better-than-expected U.S. jobs data and geopolitical risks, but worries that a slower global economy will curb appetite for oil kept a lid on prices. Brent crude futures were up 8 cents by 0647 GMT at $64.31. U.S. West Texas Intermediate (WTI) was up 6 cents at $57.57 a barrel. Gold firmed above $1,400 an ounce on Monday, helped by expectations the U.S. Federal Reserve would stay on course with an interest rate cut this month despite robust U.S. jobs data and as global growth concerns linger. Spot gold was up 0.4% at $1,404.48 per ounce. U.S. gold futures climbed 0.5% to $1,407.5 an ounce.