Reuters
Published Aug 23, 2019 15:07
US STOCKS-China's tariff blow sets Wall St for lower open ahead of Powell speech
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* Futures down: Dow 0.48%, S&P 0.45%, Nasdaq 0.59%
* China unveils retaliatory tariffs on U.S. goods
* Powell's speech to start at 10:00 a.m. ET
* HP Inc (NYSE:HPQ) falls after CEO exit, disappointing forecast
* Foot Locker (NYSE:FL) slumps after quarterly results miss estimates
(Changes comment, adds details; Updates prices)
By Akanksha Rana
Aug 23 (Reuters) - Wall Street was set to open lower on
Friday as China's threat to impose tariffs on $75 billion worth
of U.S. goods ratcheted up trade tensions ahead of a highly
anticipated speech by Federal Reserve Chair Jerome Powell.
China's commerce ministry said it would impose additional
tariffs on a total of 5,078 U.S. products that include
agricultural products, crude oil, small aircraft and cars.
Tariffs on some products would take effect on Sept. 1 and others
on Dec. 15. Shares of oil majors Exxon Mobil Corp (NYSE:XOM) XOM.N and Chevron (NYSE:CVX)
Corp CVX.N fell more than 1% in premarket trading, while those
of carmakers General Motors Co (NYSE:GM) GM.N and Ford Motor (NYSE:F) Co F.N
dropped about 2%. Business jets maker Textron Inc (NYSE:TXT) TXT.N was
down 3.3%.
"Of course China is going to retaliate. That is part of the
trade war," said Scott Brown, chief economist at Raymond James,
in St. Petersburg, Florida.
"Trade issues are going to be important heading into the
Powell speech and he has to give some indication on how the
global environment is influencing the Fed."
Powell speaks at 10 a.m. ET (1400 GMT) in Jackson Hole and
investors will be looking for confirmation that the central bank
will cut interest rate next month against the backdrop of
increasing risks for the economy, especially from the ongoing
trade war.
The minutes of the Fed's meeting in July, issued earlier
this week, showed policymakers were in doubt about whether a new
cycle of rate cuts was justified.
Investors are hoping Powell will sound more convinced when
he speaks although most analysts were playing down the chance of
a strong commitment on more cuts.
At 8:41 a.m. ET, Dow e-minis 1YMcv1 were down 126 points,
or 0.48%. S&P 500 e-minis EScv1 were down 13.25 points, or
0.45% and Nasdaq 100 e-minis NQcv1 were down 45.75 points, or
0.59%.
After three straight week of declines, the main Wall Street
indexes are on course to end the week higher thanks to signs
that U.S. consumer demand remains strong.
Also crucial to the positive mood this week is the
assumption that the Fed and other central banks, as well as some
governments, are ready to take more action to stave off any risk
of a slide into recession in the months ahead.
HP Inc HPQ.N slipped 9.2% after Chief Executive Officer
Dion Weisler stepped down and the PC maker forecast
fourth-quarter profit below analysts' estimates. Foot Locker Inc FL.N tumbled 12.4% after the footwear
retailer missed estimates on second-quarter revenue and profit.
The disappointing earnings also pulled shares of Nike Inc (NYSE:NKE)
NKE.N , its major supplier, down 0.8%. In a bright spot, Salesforce.com Inc (NYSE:CRM) CRM.N gained 6.2%
premarket after cloud-based service provider forecast
third-quarter and full-year revenue above Wall Street estimates.
Written By: Reuters
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