U.S. stock futures were sliding Monday amid concerns unrest in China may hobble global growth
How are stock index futures trading
- S&P 500 futures ES00, -0.84% dipped 27 points, or 0.7%, to 4006
- Dow Jones Industrial Average futures YM00, -0.59% fell 161 points, or 0.5%, to 34195
- Nasdaq 100 futures NQ00, -0.95% eased 89 points, or 0.8%, to 11693
On Friday, the Dow Jones Industrial Average DJIA, +0.45% rose 153 points, or 0.45%, to 34347, the S&P 500 SPX, -0.03% declined 1 points, or 0.03%, to 4026, and the Nasdaq Composite COMP, -0.52% dropped 59 points, or 0.52%, to 11226.
What’s driving markets
Wall Street is in line to start the week in a risk off mood as traders absorb the impact of unrest in China. Hong Kong’s Hang Seng HSI, -1.57% tracked U.S. futures lower, losing 1.6%.
“Unprecedented waves of protest in China have caused ripples of unease across financial markets, as worries mount about repercussions for the world’s second-largest economy,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“As demonstrations spread across the country from Beijing to Xinjiang and Shanghai, reflecting rising anger about the zero-Covid policy, a sustained recovery in demand across the vast country appears even further away,” Streeter added.
Those concerns about waning demand in China delivered weakness in industrial commodities, with copper HG00, -0.41% off 0.8% to $3.597 a pound and U.S. crude oil CL.1, -3.20% sliding 2.8% to $74.11 a barrel. That leaves oil near its cheapest this year as OPEC prepares for its next meeting on December 4.
“China is a rapacious consumer of global commodities and signs economic activity is being disrupted by the mounting dissent in the country will be seen as negative for demand. It’s worth noting that unrest is already affecting business in China including Apple which has seen violent clashes at one of its facilities in Zhengzhou,” sais Russ Mould, investment director at AJ Bell.
Shares in Apple AAPL, -1.96% were down 1.3% amid reports it could suffer a production shortfall of 6 million iPhone pros.
The prospect of unrest in China negatively impacting global growth is helping underpin government bond markets, with the 10-year Treasury yield TMUBMUSD10Y, 3.675% falling 4.4 basis points to 3.644%.
That sees the benchmark bond yield near its lowest level in 10 weeks, also forced down by hopes the Federal Reserve will start slowing the pace of its interest rate rises as inflation cools.
However, news over the weekend about strong festive-season retail sales suggest there are few signs that consumers are yet to buckle under the Fed’s tighter policy.
“U.S. shoppers spent more than $9 billion in online sales on Friday, and Cyber Monday is also expected to be a record-breaking one, with more than $11 billion to be spent,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“This is not exactly what you expect to hear when you think that the U.S. will enter a consumer-led recession in couple of weeks from now,” she added.
Further information about the health of the U.S. economy will come thick and fast this week, including home prices data and a consumer confidence index on Tuesday; the ADP employment report, the revision to third quarter GDP and the Fed’s Beige Book on Wednesday; manufacturing PMIs and the personal consumption measure of inflation on Thursday; topped off with the nonfarm payrolls report on Friday.