The major U.S. index futures are pointing to a lower opening on Monday as traders return to their desks following the long holiday weekend.
The downward momentum on Wall Street comes after China announced it is imposing tariffs on 128 imported goods originating in the U.S.
The move by China comes in response to President Donald Trump’s decision to impose tariffs on steel and aluminum imports.
China revealed it is imposing a 15 percent tariff on 120 American products such as fruits, nuts, wine and steel pipes and a 25 percent tariff on eight other products, including pork and recycled aluminum.
The decision by China has added to recent concerns about a potential trade war after Trump also announced plans to impose about $50 billion of tariffs on Chinese goods over intellectual-property violations.
Stocks rallied Thursday ahead of the Easter Break, led by big names like Boeing (BA) and Apple (AAPL). Wall Street ended a rough first quarter on a high note. For the week, the Dow ended up 2.7 percent, the S&P 500 rose 2.1 percent and the Nasdaq climbed 1 percent.
Recent pessimism about the tech sector may have been overblown, while higher oil prices helped energy stocks trim this quarter’s losses.
Microsoft (MSFT) rose more than 2 percent on reports of a reorganization within the company. Facebook (FB) stemmed its supposed collapse with a gain of about 5%.
Nvidia (NVDA) steadied after CEO Jensen Huang said Uber Technologies does not use the company’s self-driving platform architecture.
However, it was a roller coaster ride for Amazon (AMZN). The stock fought back from steep early losses as President Donald Trump tweeted that he is “concerned” about the company’s tax breaks. Shares were down about 9 percent this week.
Apple is revamping privacy controls for its devices and cloud services to comply with strict new European rules.
Constellation Brands (STX) rose after the spirits producer reported fiscal fourth quarter results that beat analyst estimates on both the top and bottom lines.
In economic news, the Labor Department released a report showing initial jobless claims fell to their lowest level in over 45 years in the week ended March 24th.
The report said initial jobless claims dipped to 215,000, a decrease of 12,000 from the previous week’s revised level of 227,000. Economists had expected jobless claims to inch up to 230,000.
With the unexpected decrease, initial jobless claims fell to their lowest level since hitting 214,000 in January of 1973.
A separate report from the Commerce Department showed personal income and spending both increased in line with economist estimates in the month of February.
The report said personal income climbed by 0.4 percent in February, matching the increases seen in the two previous months as well as expectations.
The Commerce Department also said personal spending rose by 0.2 percent for the second consecutive month. The uptick in spending also matched estimates.
Meanwhile, the University of Michigan released a report showing consumer sentiment improved by slightly less than initially estimated in the month of March.
The report said the consumer sentiment index for March was downwardly revised to 101.4 from the preliminary reading of 102.0. Economists had expected the index to be unrevised.
Despite the downward revision, the consumer sentiment index for March was still up from the final February reading of 99.7.
Commodity, Currency Markets
Crude oil futures are inching up $0.02 to $64.96 a barrel after climbing $0.56 to $64.94 a barrel last Thursday. Meanwhile, an ounce of gold is trading at $1,338.50, up $11.20 from the previous session’s close of $1,327.30 On Thursday, gold fell $2.70.
On the currency front, the U.S. dollar is trading at 106.39 yen compared to the 106.28 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2337 compared to last Thursday $1.2324.
Asian stocks ended Monday’s session mostly lower in thin holiday trading as markets in Australia, Hong Kong and New Zealand were closed.
China’s Shanghai Composite index edged down 5.04 points or 0.2 percent to 3,163.86 after manufacturing data out of China painted a mixed picture of the world’s second-largest economy and China imposed tariffs on 128 types of U.S. imports starting Monday.
While official data pointed to accelerating growth in manufacturing activity in March, the Caixin survey revealed that Chinese manufacturing activity grew at its slowest pace in four months.
Japanese shares fluctuated before closing slightly lower after a closely watched survey showed deteriorating business confidence in the first quarter.
Japan’s business confidence deteriorated in the first quarter on a stronger yen and fears of a trade war, the quarterly Tankan survey released by the Bank of Japan revealed.
The business confidence index among large manufacturers dropped to 24 in March from 26 in December. This was the first fall in two years.
The Nikkei 225 Index dropped 65.72 points or 0.3 percent to 21,388, while the broader Topix Index closed 0.4 percent lower at 1,708.78.
Exporters ended mixed, with Sony and Canon posting modest gains but Panasonic slid half a percent. Chipmaker Advantest jumped 3.4 percent and Tokyo Electron advanced 0.8 percent. Utility Kansai Electric Power climbed as much as 5.5 percent. Banks Mitsubishi UFJ Financial and Sumitomo Mitsui Financial ended down about 1 percent.
Toshiba lost 1 percent after the company said the planned sale of its memory chip unit would likely be completed in April. Japan Display slumped 6.2 percent on fund raising reports.
The major European markets are closed on the day for Easter Monday holidays.
U.S. Economic Reports
At 10 am ET, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of March.
The ISM’s purchasing managers index is expected to slip to 60.0 in March after climbing to 60.8 in February, with a reading above 50 indicating growth in the manufacturing sector.
The Commerce Department is also due to release its report on construction spending in the month of February at 10 am ET. Construction spending is expected to climb by 0.6 percent.
At 6 pm ET, Minneapolis Federal Reserve President Neel Kashkari is scheduled to speak at a Student Town Hall in Duluth, Minnesota.
Stocks In Focus
Shares of Alkermes (ALKS) are moving substantially lower in pre-market trading after the FDA rejected the biopharmaceutical company’s application for approval of an experimental depression treatment.
Wearable fitness device maker Fitbit (FIT) may also come under pressure after Morgan Stanley downgraded its rating on the company’s stock to Underweight from Equal-Weight.
On the other hand, shares of Humana (HUM) are moving sharply higher in pre-market trading on reports Walmart (WMT) is in early talks to acquire the health insurer.
Restaurant chain operator Darden Restaurants (DRI) may also see early strength after RBC Capital upgraded its rating on the company’s stock to Outperform from Sector Perform.
by RTTNews Staff Writer
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