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Dow's futures markets fell more than 100 points on Wednesday as global equities sold as a result of a trade war between the United States and China, investors worried about Beijing's reaction to political decisions of US President Donald Trump.
What did the benchmarks do?
Dow Jones Industrial Average Term
YMU8, -0.41%
slipped 134 points, or 0.5%, to 24,169, while the S & P 500 futures
ESU8, -0.29%
fell by 11.75 points, or 0.5%, to 2,716.50. Nasdaq-100
NQU8, -0.67%
fell 56.75 points, or 0.8%, to 7,047.
Tuesday, the Dow Jones Industrial Average
DJIA, + 0.12%
only edged up 0.1% to 24,283.11, closing below its 200-day moving average for the second consecutive session. The S & P 500 index
SPX, + 0.22%
gained 0.2% and the Nasdaq composite index
COMP + 0.39%
increased by 0.4%.
What motivates the markets?
US equity futures fell sharply, following signs of losses in Asia, where the Hang Seng and Shanghai Composite indices both fell by more than 1%. The negative sentiment also spread to Europe.
These measures were seen as a sign of a renewed interest in trade tensions, as US President Trump was engaged in protectionist policies, although he renounced new restrictions. severe investment in Chinese technology. The Chinese Ministry of Commerce said on Wednesday it was closely monitoring the US plan to restrict Chinese investment as trade hostilities intensify, the Wall Street Journal reported.
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Speculation about the upcoming Beijing movement focuses on an unconfirmed report by SGH Macro Advisors that President Xi Jinping has warned his government to prepare for a "large-scale trade war" and that the People's Bank of China is ready to refrain from buying Treasuries. , or even cut his purchases.
China is a major holder of US Treasuries and investors have worried about the impact of declining PCBs. The yield of the 10-year Treasury note
TMUBMUSD10Y, -1.04%
fell 2.7 basis points to 2.849% on Wednesday.
In addition, the central bank of China guided the yuan
CNYUSD, -0.3529%
at a six-month low against the US dollar on Wednesday, sending Chinese currency tumbling.
And read: Why a major trade war could mean a "full-fledged recession"
What do the strategists say?
"Chinese President Xi has released the big guns: the savvy leaders must be ready for a large-scale trade war with the US The PBOC will refrain from buying American treasuries and will seek to reduce them "appropriately" – quoting Xi's press as meeting other leaders, "said Stephen Innes, senior trader in Oanda, in a note to customers.
However, Innes added that it seems unlikely that China would increase tensions with the United States at this level, as such a move would "severely erode the value of their massive treasury holdings while throwing the global financial markets into total disarray ".
Which stocks are targeted?
Actions of World Wrestling Entertainment Inc.
WWE + 0.24%
15% Gathering in Thin Pre-Commercial Trade After Company Says it Has Signed an Agreement for its Most Significant Comcast Wrestling Programming
CMCSA, -1.03%
American network and
FOX, -0.98%
Fox Sports.
Sonic Corp.
HIS C, + 1.77%
In fact, the fast food company announced Tuesday disappointing results, even if the quarterly results exceeded forecasts.
What economic reports are on the file?
Readings on durable goods orders and anticipated trade in goods in May are expected to be released at 8:30 am Eastern time. The trade deficit is particularly concentrated given the Trump administration policy changes. This is followed at 10 am by data on pending home sales.
Randal Quarles will speak on the regulation of international banks at the Utah Bankers Association's Congress in Sun Valley, Idaho, at 11 pm Eastern Time, and the Fed President. Boston, Eric Rosengren, talks about economic downturns at the Peterson Institute in Washington DC at 12:30 East.
What are other markets doing?
SXXP, -0.08%
were down, after the Asian stock markets fell on all of the trading concerns. Hang Seng
HSI, -1.82%
in Hong Kong ended down 1.8%, while the Shanghai Composite
SHCOMP, -1.10%
decrease of 1.1%.
West Texas Intermediate Crude Oil Futures Contracts
CLQ8, + 0.79%
rose 0.8% to $ 71.09 a barrel after rising 3.6% on Tuesday to $ 70.53, its highest level since May 21st.
Gold futures
GCQ8, -0.02%
fell to $ 1,258.80 an ounce, while the ICE U.S. Dollar Index
DXY, + 0.05%
was up 0.2%.
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