Stocks - U.S. Futures Decline on Weak Chinese, German Data
Investing.com - U.S. futures fell on Wednesday as data from China and Germany showed the continuing damage to the world economy from trade-related disputes.
Industrial output growth in China fell to a 17-year low in July, while Germany’s 0.1% decline in GDP pointed towards the euro zone’s biggest economy suffering a recession this year, analysts said.
"Given varied risks, a gloomy global trade outlook and elevated uncertainty, we expect the (German) economy to post another mild decline in Q3 19 and therefore enter a technical recession even before Brexit and US-EU trade risks are due to crystallize," Barclays (LON:BARC) economist Iaroslav Shelepko said in a note to clients after the data.
The signs of economic weakness were a sobering reminder of the challenges to equity markets, ending a short-lived relief rally on Tuesday triggered by the U.S.'s decision to delay new tariffs on some Chinese goods to early December.
Nasdaq 100 futures fell 74 points or 1% by 6:42 AM ET (10:42 GMT), while Dow futures dipped 235 points, or 0.9%, and S&P 500 futures declined 25 points or 0.9%.
Technology companies were down in premarket trade, on worries that the slowdown in the Chinese economy - as reflected in another drop in retail sales growth in July - could hit their bottom line. Apple (NASDAQ:AAPL) fell 1.5%, while AMD dipped 1.6% and Intel (NASDAQ:INTC) declined 0.9%.
Banking stocks were under pressure on fears for their profit margins as the yield curve stays stubbornly inverted. Citigroup (NYSE:C) lost 2.3%, while JP Morgan was down 1.8% and Morgan Stanley (NYSE:MS) fell 2.1%.
Cannabis company Tilray (NASDAQ:TLRY) fell 8.8% after posting a bigger-than-expected loss due to increased operating expenses.
Second-quarter earnings season is winding down this week, but networking gear maker Cisco (NASDAQ:CSCO) will still be closely-watched when it reports after the close.
In commodities, crude oil slumped 1.6% to $56.17 a barrel after reaching a high of $57.10 during the prior session. Gold futures gained 0.3% to $1,518.55 a troy ounce, while the U.S. dollar index, which measures the greenback against a basket of six major currencies, was down 0.1% to 97.537.
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