U.S. Stock Index Futures Pressured Early on China Economic Data Misses

U.S. stock index futures are trading lower early Friday, mostly in reaction to the weaker-than-expected economic data from China. The major cash market stock indexes finished mixed on Thursday during a choppy session as investors digested new developments in the ongoing U.S.-China trade dispute.
James Hyerczyk
Stocks Buy Sell Dice
Stocks Buy Sell Dice

The major Asian stock indexes are trading lower on Friday after China released a series of weaker-than-expected economic reports. The latest reports showed the world’s second largest economy is under pressure on both the global and domestic front. The weakness also highlights the impact the trade dispute with the U.S. is having on the economy along with the failure of policy efforts designed to stimulate the economy.

At 0437 GMT, Japan’s Nikkei 225 Index is trading 21496.27, down 319.92 or -1.47%. Hong Kong’s Hang Seng Index is at 26159.81, down 364.54 down -1.37%.

Australia’s S&P/ASX 200 is trading 5616.80, down 44.80 or -0.79%. China’s Shanghai Index is at 2619.07, down 14.98 or -0.57%.

China Reports Slew of Economic Misses

China reported that industrial production in November grew 5.4 percent year-on-year, lower than the 5.9 percent forecast. Retail Sales rose 8.1 percent last month, below the 8.8 percent expected. That was the weakest pace since 2003.

Other reports showed Fixed Asset Management rose 5.9% as expected, slightly higher than the 5.7% increase reported last month. The Unemployment Rate fell slightly to 5.8% from 5.9%.

U.S. Equity Markets

U.S. stock index futures are trading lower early Friday, mostly in reaction to the weaker-than-expected economic data from China. The major cash market stock indexes finished mixed on Thursday during a choppy session as investors digested new developments in the ongoing U.S.-China trade dispute.

In the cash market, the benchmark S&P 500 Index settled at 2655.50, up 4.43 or +0.17%. The blue chip Dow Jones Industrial Average finished at 24591.00, up 63.73 or +0.26% and the tech-based NASDAQ Composite closed at 7070.33, down 27.98 or -0.38%.

The markets were primarily supported by a few minor trade related events this week including China’s lowering of tariffs on U.S. automobiles, and a reported buy of at least 500,000 tons of U.S. soybeans. Furthermore, President Trump evened offered to intervene in the Justice Department’s case against Huawei CFO Meng Wanzhou if it would help smooth over U.S.-China trade relations.

In other news, General Electric shares jumped more than 7 percent after J.P. Morgan analyst Stephen Tusa, a longtime bear on the company, upgraded GE. The analyst cited a more “balanced risk reward at current levels.”

U.S. markets are expected to open lower due to the weakness in China, but prices could turnaround if U.S. data is strong enough to ease concerns over a weakening global economy. The most important reports are U.S. Retail Sales and Core Retail Sales. They are expected to come in at 0.1% and 0.2% respectively.

Capacity Utilization is expected to come in at 78.6%. Industrial Production is estimated to have risen 0.3%. Flash Manufacturing PMI is expected to come in at 55.1. Flash Services PMI is expected to remain flat at 54.7. Business Inventories are called 0.6% higher.

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