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Stock Futures Fall as Trump Reloads Tariff Bazooka: Markets Wrap

Adam Haigh
A pedestrians is reflected in an electronic stock board outside a securities firm in Tokyo, Japan, on Tuesday, June 12, 2018. Japanese stocks rose as President Donald Trump and North Korean leader Kim Jong Un met in Singapore and signed a joint agreement. Photographer: Shiho Fukada/Bloomberg

U.S. and Japan equity futures dropped with Treasury yields on news that the Trump administration is preparing the biggest list yet of Chinese goods to be hit with tariff increases. The yen climbed and the Aussie and kiwi retreated.

Futures on the S&P 500 Index tumbled, ending the positive tone to equities enjoyed at the start of the week thanks to optimism about the corporate-earnings season. Treasuries rose at the end of Tuesday’s session as news about the plans emerged. The U.S. Trade Representative office said that President Donald Trump has ordered the preparation of a proposed list of $200 billion of Chinese imports for tariff hikes.

The escalating trade war between the world’s two biggest economies has hit Chinese and Asian equities harder than American ones, with the latest news setting the tone for a volatile Wednesday in Asia. The next risk is retaliation threats from China. Investors are hoping for a bumper corporate earnings season turning, with expectations that strong results can complement a recent run of positive economic data and overshadow growth concerns stemming from trade tensions.

Terminal users can read more in Bloomberg’s Markets Live blog.

Elsewhere, oil steadied after an industry report was said to show shrinking U.S. crude stockpiles.
These are some events to look out for this week:

  • Earnings season gets going with JPMorgan Chase & Co. and Citigroup Inc. among the largest companies due to give results, as well as India’s Infosys Ltd.
  • The most noteworthy U.S. data may be the June inflation report on Thursday, which consensus expects will show both headline and core price growth picking up. There’s another deluge of Treasury debt sales too, with a total $156 billion of notes and bills offered.
  • Chinese trade data due at the end of the week will probably show slightly slower export growth, after early indicators pointed to softer overseas demand and weaker export orders, Bloomberg Economics said.

Here are the main market moves:

Stocks

  • Futures on the S&P 500 fell 0.8 percent. The underlying gauge earlier closed 0.4 percent higher on Tuesday.
  • Futures on Japan’s Nikkei 225 dropped 0.7 percent.

Currencies

  • The Japanese yen rose 110.86 per dollar, compared with 111.27 before the tariff report came out.
  • The euro fell 0.1 percent to $1.1735.
  • The Aussie was down 0.5 percent at 74.23 U.S. cents.

Bonds

  • The yield on 10-year Treasuries slipped one basis point to 2.85 percent Tuesday.

Commodities

  • West Texas Intermediate crude was flat at $74.04 a barrel.
  • Gold was little changed at $1,254.75 an ounce.

Read Stock Futures Fall as Trump Reloads Tariff Bazooka: Markets Wrap on bloomberg.com