U.S. Stock Futures Decline Amid Uncertainty on U.S.-China Trade Deal
October 31 2019 - 7:56AM
Dow Jones News
By Caitlin Ostroff
U.S. stock futures and European equities fell Thursday following
fresh concerns about the U.S.-China trade deal and the Federal
Reserve's signals that it may pause interest-rate cuts.
Futures linked to the S&P 500 index dipped 0.3% and the
pan-continental Stoxx Europe 600 gauge dropped 0.4%. Chinese
officials have warned that they won't budge on some of the most
difficult issues that need to be negotiated with the U.S., and
expressed concerns that President Trump may back out of even the
initial deal they hope to reach in coming weeks, according to
Bloomberg.
The markets have underestimated the difficulty in negotiating a
long-term deal between the two nations given the complexity of
their links, according to Neil Dwane, global strategist at Allianz
Global Investors.
"There are many, many facets to the changing relationship
between the U.S. and China," Mr. Dwane said. "The trade issue is
arguably the least important."
European stocks wavered earlier in the day as investors also
took note of the Fed's policy statement, which signaled a higher
hurdle for rate reductions after its third cut this year. The WSJ
Dollar Index, which tracks the greenback against a basket of 16
currencies, fell 0.2% Thursday.
Assets considered to be a haven at times of uncertainty saw an
uptick. Gold climbed 0.8% and government-bond prices rose. The
yield on 10-year Treasurys fell to 1.738% from 1.801%
Wednesday.
Early U.S. trading saw major moves in blue-chip stocks.
Facebook jumped 3.7% in offhours trading after the social-media
giant's quarterly profit and sales exceeded Wall Street's
expectations. Kraft Heinz Co. shares jumped 6.1% in premarket
trading after the food company beat forecasts for its quarterly
profit.
Starbucks climbed 2.5% after stronger U.S. sales of iced coffee
and other cold drinks bolstered revenue in the latest quarter for
the world's largest coffee chain. Apple ticked up 1.5% after it
reported growth in gadgets and services that helped offset a
decline in iPhone sales.
Shares of Western Digital dropped 7.5% before the opening bell
after the data-storage device company swung to a loss in the latest
quarter. Estée Lauder declined 3% after the cosmetics company
scaled back its earnings guidance.
Over in Europe, Peugeot maker PSA Group was the worst performer,
dropping 13.4% following its agreement to merge with Fiat Chrysler
Automobiles in a deal that will create one of the world's largest
auto makers by volume.
Fiat shares climbed 7.7% in Milan, while shares of rival Renault
slumped 3.4%.
Royal Dutch Shell shares trimmed 3.1% after the oil giant
expressed uncertainty over the pace of it completing its $25
billion share buyback, raising doubt over whether the program would
be finished by the end of 2020.
Earlier Thursday, data showed Chinese manufacturing activity
fell to an eight-month low in October, in another signal that the
world's second-largest economy is under pressure from the trade
tensions. The Shanghai Composite Index fell 0.4%.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
October 31, 2019 08:41 ET (12:41 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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