Market Snapshot: Stock-index futures edge lower after weak China data



Stock-index futures edged lower Friday, pointing to a downbeat start for Wall Street, after a round of disappointing Chinese economic data, while tech shares appeared set to feel pressure from lower guidance by tech conglomerate Broadcom Inc., which cited trade-related worries.

What are major indexes doing?

Futures on the Dow Jones Industrial Average YMU19, -0.16%   fell 29 points, or 0.1%, to 26,088, while S&P 500 futures ESU19, -0.25%   declined 6.65 points, or 0.2%, to 2,888. Nasdaq-100 futures NQU19, -0.68%  declined 48.25 points, or 0.7%, to 7,473.25.

The Dow DJIA, +0.39%  on Thursday rose 101.94 points, or 0.4%, to close at 26,106.77, while the S&P 500 SPX, +0.41%  advanced 11.8 points, or 0.4%, to finish at 2,891.64. The Nasdaq Composite COMP, +0.57%  gained 44.41 points, or 0.6%, to end at 7,837.13. Major indexes are on track for weekly gains and are solidly higher for the month.

What’s driving the market?

A weaker tone was attributed in part to signs of further cooling of business activity in China, with May industrial output and investment figures slowing further. May industrial output growth slowed to a more than 17-year low, the weakest since since 2002, and well below expectations. Value-added industrial output rose 5% in May after a 5.4% rise in April. Economists had penciled in a 5.5% rise. Fixed-asset investment outside rural households rose 5.6% in the January-May period from a year earlier, slowing from the 6.1% rise seen in the January-April period. Retail sales, however, saw a stronger-than-expected climb of 8.6% in May.

Investors continue to watch developments in the Middle East after a pair of oil tankers were attacked near the Strait of Hormuz. The U.S. blamed Iran, while Tehran denied responsibility. The incident escalates tensions in the region, heightening fears of a potential U.S.-Iran military confrontation and disruption to oil supplies.

Read: Strait of Hormuz: Attack on oil tankers puts crucial transport ‘choke point’ in focus

The news sent oil futures higher, but they ended off session highs Thursday. Stock-market bulls appeared unfazed by the developments.

Broadcom AVGO, +0.67%   lowered its guidance for the rest of the year after reporting second-quarter earnings Thursday afternoon. The update dents hopes for a rebound in the semiconductor market, with the company citing a combination of the U.S. sanctions on Chinese technology giant Huawei Technologies Co. and customers made jittery by trade policy concerns. Shares were down 9.5% in premarket action.

Trade tensions continue to rattle executives outside the technology sector too, as a group of more than 600 companies, including Walmart Inc. WMT, -0.16%   and Target Corp. TGT, +0.05%   signed a letter to President Trump Thursday afternoon urging him to remove tariffs on Chinese imports.

What other companies are in focus?

Facebook Inc. FB, +1.39%   shares could be in focus Friday, after the Wall Street Journal reported the social network is set to announce a partnership with more than a dozen companies to create a cryptocurrency called Libra. Partners include Visa Inc. V, -1.31%  , Mastercard Inc. MA, -1.00% Paypal Holdings Inc. PYPL, +1.07% and Uber Technologies Inc. UBER, +5.07%  

Chewy Inc. shares are set to debut Friday on the New York Stock Exchange, after the online pet-supply retailer announced Thursday that it would sell more shares at a higher price than originally expected. The company said it will sell at least 46.5 million shares at $22 a share, which would bring in more than $1 billion at an initial valuation approaching $9 billion.

Opinion: Broadcom slaps down hopes for a second-half rebound in chips

What are the analysts saying?

“A further testing of the already strained relationship between the US and Iran, and another round of data disappointments from China, set the scene for a slow and sour start to Friday,” wrote Connor Campbell, financial analyst at Spreadex in a Friday note. “The Chinese data overnight was not good, and the country is clearly feeling the trade war pinch.”

What’s on the economic calendar?

U.S. May retail sales data is due at 8:30 a.m. Eastern Time. Economists surveyed by MarketWatch are looking for a 0.7% rise, rebounding from a 0.2% April decline. Sales excluding autos are expected to be up 0.3%, up from a 0.1% rise in April.

Data on industrial production and capacity utilization is set for release at 9:15 a.m. Economists are looking for a 0.2% rise in production, while utilization is expected to edge up to 78% from 77.9% in April.

A June reading on consumer sentiment is due at 10 a.m. Data on April business inventories is also due at that time.

How are other markets trading?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -1.00%   fell roughly 2 basis points to 2.065.

Asian markets closed mostly lower Friday, with Hong Kong’s Hang Seng index HSI, -0.65%   losing 0.7% and China’s Shanghai Composite index SHCOMP, -0.99%   falling 1%. Japan’s Nikkei 225 NIK, +0.40% meanwhile, rose 0.4%. In Europe, stocks were on the retreat, as shown by the Stoxx Europe 600 SXXP, -0.62%

Crude oil CLN19, -0.27%   prices were retreating slightly, while gold GCN19, +1.16%   surged. The U.S. dollar DXY, +0.09% meanwhile, edged higher against a basket of its peers.

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