Stocks - U.S. Futures Fall as Trump Keeps Another Shutdown on the Table
Investing.com - U.S. futures pointed to a lower open on Monday as U.S. President Donald Trump suggested that the reopening of the government would likely be temporary, and traders awaited a key week in the ongoing U.S.-China trade saga, the latest Federal Reserve policy decision and a swarm of earnings reports.
The blue-chip Dow futures lost 100 points, or 0.40%, to 24,596.0 points by 6:46 AM ET (11:46 GMT), the S&P 500 futures fell 12 points, or 0.43%, to 2,652.00 points, while the tech-heavy Nasdaq 100 futures traded down 37 points, or 0.55%, to 6,754.12 points.
After reopening the government on Friday, Trump told The Wall Street Journal over the weekend that he was dubious that lawmakers could avoid another government shutdown when the current extension to funding expires on Feb. 15.
Trump said that the chance of an agreement that includes $5.7 billion in funding for a wall on the southern border was less than 50% and that another shutdown was “certainly an option”.
Rabobank strategists commented, “As things stand this morning, we have only 18 days left before we get another government shutdown, or a Wall. That should keep things interesting for markets.”
Investors were also cautious ahead of Chinese Vice Premier Liu He's visit the United States on Jan. 30-31 for the next round of trade negotiations with Washington.
The high-level talks in Washington will include discussions about China's currency practices, U.S. Treasury Secretary Steven Mnuchin said. He has criticized the yuan's weakness in the past, but in recent days, positive sentiment toward the talks has lifted the yuan's value against the dollar.
“Although coming to an agreement is still tricky, both sides have little incentive to escalate tensions,” said Tai Hui, Hong Kong-based chief market strategist for Asia Pacific at J.P. Morgan Asset Management, in a note. “Markets will at least expect an extension of the truce in tariff increases beyond early March, while more difficult issues are still being worked on by both sides.”
Earnings will also be in the spotlight this week as 124 of the S&P 500 companies report quarterly numbers.
The busy week will start off slow with Dow component Caterpillar (NYSE:CAT) to report ahead of Monday’s opening bell. Results from Whirlpool (NYSE:WHR) and AK Steel (NYSE:AKS) are due after the close.
Elsewhere, European stocks were lower, with most major bourses across the region in negative territory.
Earlier, markets in Asia closed mixed.
Outside of equities, the U.S. dollar index, which measures the greenback against six rival currencies, inched up 0.05% to 95.51 by 6:49 AM ET (11:49 GMT), while the yield on the 10-year Treasury gained 0.9 basis points to 2.76%.
In commodities, gold futures edged forward 0.10% at $1,299.45 a troy ounce, while crude oil traded down 1.71% to $52.77 a barrel.
-- Reuters contributed to this report.
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