Dow Futures Drubbed by Trump Trade Rhetoric

President Trump said he may wait until after the election to strike a trade deal with China

by Patrick Martin

Published on Dec 3, 2019 at 9:15 AM

After the market kicked off December on a sour note, Dow futures are now staring at an over 200-point drop, pivoting away from earlier gains after President Donald Trump's remarks at a London news conference. Speaking ahead of a NATO meeting, Trump's noted he "like[s] the idea of waiting until after the [2020] election for the China deal," casting doubt that a trade deal with Beijing will be reached ahead of the looming Dec. 15 deadline for tariff hikes. Elsewhere, Trump also took aim at France's new digital services tax, after the White House threatened yesterday it could impose duties of up to 100% on $2.4 billion worth of French imports. 

Continue reading for more on today's market, including: 

  • Schaeffer's Senior V.P. of Research Todd Salamone explains why IWM call options are a smart way to manage risk right now.
  • Breaking down these big Ford options bets.
  • Plus, AK Steel bought out by Cleveland-Cliffs; PG&E hit with damning probe; and Facebook has a fan in Piper Jaffray.

Stock Futures Chart Dec 3

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw 991,406 call contracts traded on Monday, compared to 654,018 put contracts. The single-session equity put/call ratio edged up to 0.66, while the 21-day moving average rose to 0.59.
  2. AK Steel Holding Corporation (NYSE:AKS) stock is up 8.3% in electronic trading, after Cleveland-Cliffs Inc (NYSE:CLF) agreed to buy the company for $1.1 billion in an all-stock deal. The acquisition is expected to close in the first half of next year, barring regulatory approvals. AKS is on track for its highest open since late February, and looks ready to clear resistance at its 320-day moving average.
  3. PG&E Corporation (NYSE:PCG) stock is down 1.5% ahead of the bell, after a California state probe showed the utility company neglected inspection of transmission lines that caused the deadly 2018 Camp Fire. PCG is down 67% year-to-date, and facing stiff pressure from its 50-day moving average.
  4. The shares of Facebook, Inc. (NASDAQ:FB) are down 1.1% in electronic trading, despite a bullish initiation from Piper Jaffray. The brokerage firm doled out an "overweight" rating and $230 price target for the FAANG stock, citing online ad spending as a 2020 catalyst. FB has added 15% since its early October pullback to support at its 200-day moving average.
  5. Today's economic calendar will feature monthly auto sales. AeroVironment (AVAV), AutoZone (AZO), Marvell Technology (MRVL), Salesforce.com (CRM), Workday (WDAY), and Zscaler (ZS) will report earnings.

Buzz Chart Dec 3

European Stocks Weighed Down By Trade Barbs

Stocks in Asia closed mostly lower, though they managed to pare much of their early deficits, with the Shanghai Composite coming all the way back to close in positive territory. The Chinese benchmark added 0.3% for the day, while Hong Kong’s Hang Seng settled with a 0.2% loss, weighed down by disappointing retail data for October. Japan’s Nikkei ended in the red, as well, dropping 0.6%, and South Korea’s Kospi closed down 0.4%. 

European indexes are moving lower today on heightened trade war fears. London’s FTSE 100 is leading the sell-off with a 1.4% decline, putting the index on pace for its lowest close since mid-October. France’s CAC 40 is also getting hit hard, last seen 0.7% lower, with luxury retailers in particular suffering big losses after Trump threatened more tariffs on the country's imports. The German DAX, meanwhile, has managed a 0.4% gain. 

 

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