US STOCKS-Wall St to open lower as China tariffs revive trade war fears - Reuters News
02-Apr-2018 09:05:44 PM
• Tesla drops after saying crashed car was on autopilot
• Humana up after report Walmart discussing tie-up, acquisition
• Amazon falls after Trump again targets the online giant
• Futures down: Dow 138 pts, S&P 11.75 pts, Nasdaq 54.25 pts
Adds comments, details, updates prices
By Sruthi Shankar
April 2 (Reuters) - Wall Street was set to start the second quarter on a downbeat note on Monday as China's decision to raise import tariffs on U.S. products revived global trade war fears and technology stocks remained under pressure.
Nasdaq futures pointed to a 0.8 percent decline at the open as big names including Facebook and Amazon slipped in premarket trading.
China, late on Sunday, said it would increase tariffs by up to 25 percent on 128 U.S. products, escalating a spat between the world's biggest economies. The move came in response to U.S. duties on imports of aluminum and steel.
"That's going to start stoking fears of trade wars and protectionism. The market doesn't really like that," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
"And if it escalates, the questions could be on if China is going to buy our bonds. We have speculation out there, but it could be some profit taking and some risk-off mentality for the moment."
U.S. President Donald Trump is separately preparing to impose tariffs of more than $50 billion targeting "largely high-technology" Chinese products.
At 8:33 a.m. ET, Dow e-minis were down 138 points, or 0.57 percent, with 33,657 contracts changing hands.
S&P 500 e-minis were down 11.75 points, or 0.44 percent, with 102,321 contracts traded.
Nasdaq 100 e-minis were down 54.25 points, or 0.82 percent, on volume of 39,975 contracts.
Amazon fell 1.5 percent after Trump launched his second attack over the weekend, accusing the world's biggest online retailer of getting unfairly cheap rates from the U.S. Postal Service and not paying enough tax.
Facebook fell 0.8 percent as the data scandal last month continued to weigh. On Monday, brokerage Pivotal Research slashed its price target, citing a faster-than-expected deceleration in the social media company's revenue growth.
Hit by concerns about a possible trade war, rising interest rates and valuations in the technology sector, the S&P 500 and the Dow Jones Industrial Average posted their worst declines in more than two years in the quarter ended March.
Nervous investors are hoping an unusually strong U.S. earnings season can restore some of the optimism that characterized equity markets last year.
Tesla shares fell about 4 percent after the electric car maker said the Model X vehicle that recently crashed was on Autopilot and also announced a recall.
Humana rose about 6 percent after a report that Walmart was in early-stage talks with the health insurer about developing closer ties, with acquisition discussed as one possibility. Walmart declined more than 1 percent.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)
UPDATE 7-China hammers U.S. goods with tariffs as "sparks" of trade war fly - Reuters News
02-Apr-2018 08:51:41 PM
• China imposes tariffs of up to 25 pct on 128 U.S. goods
• New trade measures effective from April 2
• China's commerce ministry calls for negotiations
Adds Xinhua commentary, detail on Chinese tech products
By Ben Blanchard and Tony Munroe
BEIJING, April 2 (Reuters) - China has increased tariffs by up to 25 percent on 128 U.S. products, from frozen pork and wine to certain fruits and nuts, escalating a dispute between the world's biggest economies in response to U.S. duties on imports of aluminium and steel.
The tariffs, to take effect on Monday, were announced late on Sunday by China's finance ministry and matched a list of possible tariffs on up to $3 billion in U.S. goods published by China on March 23.
Soon after the announcement, an editorial in the widely read Global Times newspaper warned that if the United States had thought China would not retaliate or would only take symbolic counter-measures, it could "say goodbye to that delusion".
"Even though China and the U.S. have not publicly said they are in a trade war, the sparks of such a war have already started to fly," the newspaper said.
The Ministry of Commerce said it was suspending its obligations to the World Trade Organization (WTO) to reduce tariffs on 120 U.S. goods, including fruit and ethanol. The tariffs on those products will be raised by an extra 15 percent.
Eight other products, including pork and scrap aluminium, would now be subject to additional tariffs of 25 percent, it said, with the measures effective from April 2.
"China's suspension of its tariff concessions is a legitimate action adopted under WTO rules to safeguard China's interests," the finance ministry said.
China is moving swiftly with retaliatory action amid escalating trade tension with the United States, which has rocked global financial markets in the past week as investors fear a full-blown trade dispute between them will damage world growth.
U.S. President Donald Trump is separately preparing to impose tariffs of more than $50 billion on Chinese goods following an investigation under Section 301 of the 1974 U.S. Trade Act.
The U.S. administration says China has systematically misappropriated American intellectual property - allegations China denies.
About the Section 301 investigation, China had "yet to unsheathe its sword", the official Xinhua news agency said.
Sometime this week, the Trump administration is expected to unveil a list of Chinese goods that could be subjected to new U.S. tariffs.
U.S. technology industry officials said they expected the list to target products that benefit from Beijing's "Made in China 2025" programme, which aims to upgrade the domestic manufacturing base with more advanced products.
China has repeatedly promised to open its economy further, but many foreign companies complain of unfair treatment. China warned the United States on Thursday not to open a Pandora's Box and spark a flurry of protectionist practices across the globe.
"There are some people in the West who think that China looks tough for the sake of a domestic audience, and would easily make concessions," the Global Times said.
"But they are wrong."
The Global Times is run by the ruling Communist Party's official People's Daily, although its stance does not necessarily reflect government policy.
Reaction to China's measures varied on social media, with some saying Chinese customers would be the ones to ultimately pay for a trade war.
"Why not directly target soybean and planes? The tariffs that China announced today don't sound a lot to me," said a user on the Weibo microblog platform.
Aircraft and soybeans were China's biggest U.S. imports by value last year.
In a statement published on Monday morning, the commerce ministry said the United States had "seriously violated" the principles of non-discrimination enshrined in World Trade Organization rules, and had also damaged China's interests.
"China's suspension of some of its obligations to the United States is its legitimate right as a member of the World Trade Organization," it said, adding that differences should be resolved through negotiation.
Weibo prominently featured the list of U.S. goods that China is targeting among the day's "hot" trending topics.
"I will never buy fruit from the U.S.," a Weibo user wrote.
(Reporting by Ben Blanchard and Tony Munroe; Additional reporting by David Stanway in SHANGHAI and Stella Qiu and Lusha Zhang in BEIJING
Additional Writing by Ryan Woo
Editing by Eric Meijer and Shri Navaratnam)
UPDATE 4-Oil rises towards $70 on lower U.S. drilling, Iran sanctions concern - Reuters News
02-Apr-2018 07:23:17 PM
• U.S. drillers cut rigs for first time in three weeks
• Concerns of U.S. sanctions against Iran also support crude
• Rising Russian output, U.S-China trade spat limit gains
Updates prices
By Alex Lawler
LONDON, April 2 (Reuters) - Oil rose towards $70 a barrel on Monday, lifted by a drop in drilling activity in the United States and concerns that Washington could reintroduce sanctions against Iran.
U.S. drillers cut seven oil rigs in the week to March 29, bringing the total down to 797, the first decline in three weeks. The rig count is closely watched as an indicator of future U.S. oil output.
Brent crude, the international benchmark, rose 47 cents to $69.81 a barrel by 1111 GMT. It was still below its 2018 high of $71.28 reached on Jan. 25. U.S. crude added 27 cents to $65.21.
Trading volume was lower than normal as many countries were still on Easter holiday.
"The market is set for a re-test of the highs of 2018," said Olivier Jakob, oil analyst at Petromatrix.
"The Iranian factor is going to be a very significant input for the next four weeks. It is going to be an underlying support for the whole month."
U.S. President Donald Trump has threatened to pull out of a 2015 international nuclear deal with Tehran under which Iranian oil exports have risen. He has given the European signatories a May 12 deadline to "fix the terrible flaws" of the deal.
Oil has risen from a multi-year low near $27 in January 2016, helped by production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, which started in 2017 and are due to run until the end of 2018.
The revival in prices has helped to support a surge in U.S. drilling, which has boosted U.S. production to a record 10.43 million barrels per day (bpd), taking it past top exporter Saudi Arabia.
Russian oil output rose in March despite the output deal, to 10.97 million bpd from 10.95 million bpd in February, Russian Energy Ministry data showed, putting Russia ahead of the United States as the world's biggest crude producer.
Also potentially weighing on markets were rising trade tensions between the United States and China.
China increased tariffs by up to 25 percent on 128 U.S. products from Monday, escalating a spat between the world's biggest economies in response to U.S. duties on imports of aluminium and steel.
"Investors took their cue from falling U.S drilling counts," said Wang Xiao of Guotai Junan Futures. "But increasing trade friction between China and the U.S. is likely to rock global markets and tarnish bullish sentiment in crude oil markets."
(Additional reporting by Meng Meng in Beijing and Henning Gloystein in Singapore; Editing by Susan Fenton)
PRECIOUS-Gold rises on renewed U.S.-China trade tensions - Reuters News
02-Apr-2018 03:32:06 PM
• China imposes tariffs of up to 25 pct on 128 U.S. goods
• Gold snaps three-day losing streak
• Specs raise net long position in COMEX gold -CFTC
(Adds trader's comment, updates prices)
By Swati Verma
BENGALURU, April 2 (Reuters) - Gold prices rose on Monday as the dollar eased amid renewed concerns over a trade war after China imposed additional tariffs on U.S. products in response to U.S. duties on imports of aluminium and steel.
After falling in the past three trading sessions, spot gold edged up 0.5 percent to $1,331.19 per ounce at 0706 GMT.
China has slapped extra tariffs of up to 25 percent on 128 U.S. products including frozen pork, as well as wine and certain fruits and nuts, in response to U.S. duties on imports of aluminium and steel.
The tariffs take effect on Monday and match a list of potential tariffs on up to $3 billion in U.S. goods published by China on March 23.
"The trade war is going on and it is getting worse, so that might be the reason that people are selling dollar and buying gold," said Yuichi Ikemizu at ICBC Standard Bank in Tokyo.
The dollar index, which measures the greenback against six other major currencies, eased 0.3 percent to 89.929.
U.S. gold futures rose 0.6 percent to $1,334.90 an ounce.
Gold fell 1.7 percent last week in its biggest such drop since early December. But the precious metal climbed 1.7 percent in January-March, posting its third straight quarterly gain.
The market is trading higher on bargain-hunting amid expectations that prices have hit bottom, said a Singapore-based trader.
"Even the most steel-nerved trader will be tempted to go in now," he said.
Hedge funds and money managers increased their net long positions in COMEX gold contracts in the week to March 27, U.S. Commodity Futures Trading Commission data showed on Friday.
Gold speculators raised their net long position by 50,996 contracts to 172,834 contracts, CFTC data showed.
In other precious metals, spot silver climbed 0.8 percent to $16.45 per ounce.
Platinum rose 0.8 percent to $935 per ounce, having fallen to its lowest since end-December in the previous session.
Palladium was down 0.1 percent at $950.55 an ounce after dropping to $938.22 on Thursday, its lowest level since Oct. 11.
(Reporting by Swati Verma in Bengaluru; Editing by Manolo Serapio Jr.)
CBOT Trends-Corn up 2-4 cents, soy up 8-10 cents, wheat up 3-5 cents - Reuters News
02-Apr-2018 09:07:59 PM
CHICAGO, April 2 (Reuters) - Following are U.S. trade expectations for the resumption of the grain and soy complex trading at the Chicago Board of Trade at 8:30 a.m. CDT (1330 GMT) on Monday.
WHEAT - Up 3 to 5 cents per bushel
• K.C. hard red winter wheat futures lead on forecast for dry conditions in the southwest U.S. Plains. Weak dollar also supportive. CBOT May soft red winter wheat briefly broke through resistance at 100-day moving average during overnight trading but failed to hold support above that key technical point.
• CBOT May soft red winter wheat last traded up 4-3/4 cents at $4.55-3/4 per bushel. K.C. May hard red winter wheat was last up 7-1/4 cents at $4.74-1/2 and MGEX May spring wheat was last up 1 cent at $5.79-1/2.
CORN - Up 2 to 4 cents per bushel
• Gains in wheat, soybeans leading corn market higher. Forecasts for cold, wet spring that could delay plantings in U.S. Midwest also seen as supportive.
• CBOT May corn last traded up 3 cents at $3.90-3/4 a bushel.
SOYBEANS - Up 8 to 10 cents per bushel
• Continued strength, underpinned by Friday's U.S. Agriculture Department report that surprisingly forecast drop in soybean acreage. Most-active soybean futures contract hit highest since March 9 during overnight session. New-crop November soybeans hit contract high.
• CBOT May soybeans last traded up 9 cents at $10.53-3/4 per bushel.
(Reporting by Mark Weinraub; Editing by David Gregorio)
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