Opening Bell: U.S. Futures Fall As China Toughens Its Stance Ahead Of Trade Talks

 | Oct 07, 2019 06:01AM ET

  • U.S. futures slide on signals of harder trade negotiations stance from China

  • Treasury yields, U.S. dollar gain ground

  • Pound slips on EU-U.K. Brexit deal deadlock

  • Oil rebounds

    • h2 Key Events/h2

    Futures on the S&P 500, Dow and NASDAQ 100 dropped this morning on news that Chinese officials may resist a broad-based trade agreement with the U.S., as they reportedly narrowed the range of items they’re willing to negotiate in this week’s meetings in Washington.

    European shares on the STOXX 600 managed to cling onto an advance, with most sectors posting gains.

    In the earlier Asian session, Hong Kong’s Hang Seng was—maybe luckily—closed for a holiday, after losing 1.11% on Friday in the wake of violent protests after the government enforced a ban on face masks. Australia’s S&P/ASX 200 (+0.71%) outperformed on thin volumes, riding the coattails of Friday’s Wall Street performance.

    h2 Global Financial Affairs/h2

    In Friday’s U.S. session, equities climbed for the second day on stimulus speculation, with the tech sector in the lead.

    However, on a weekly basis, stocks sealed the third consecutive decline on trade, domestic political instability and a string of negative economic headlines—where a nonfarm payroll data miss added to underwhelming manufacturing and non-manufacturing numbers.

    Yields on 10-year Treasurys extended a rebound, retesting Sunday’s low—the lowest since Sept. 4. The Dollar Index climbed with yields, also retaining its ascent and ending a four-day decline.

    Traders were buying the dollar and selling the pound amid growing pessimism on the likelihood of an orderly Brexit on Oct. 31.