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US pre-open: Futures point to losses at the bell after White House blacklists Huawei

By Iain Gilbert

Date: Monday 20 May 2019

US pre-open: Futures point to losses at the bell after White House blacklists Huawei

(Sharecast News) - Wall Street futures pointed to losses at the bell on Monday, with market participants concerned about the potential repercussions of the White House's crackdown on Chinese telecommunications giant Huawei.
As of 1225 BST, Dow Jones futures were pointing to a loss of 0.51%, or 131 points, at the bell, while S&P 500 and Nasdaq futures had the indices opening 0.67% and 1.31% lower, respectively.

US stocks looked set to start lower after the Dow slid 0.7% over the previous week, stretching its weekly losing streak out to four, the index's longest since May 2016.

The Trump administration added Huawei to a trade blacklist last week, leading Google parent company Alphabet to stop some business with the group - including the transfer of hardware, software and key technical services.

As a result, Huawei is no longer able to license Google's proprietary Android operating system and other services and can only use a public version of the operating system via the Android Open Source Project.

While the intensifying trade war between the two biggest economies in the world continued to rattle global financial markets, the US' decision to remove tariffs on Canadian and Mexican steel and aluminium was seen as likely to provide some relief.

Discussing the day ahead, TD Securities said: "Markets will remain focused on trade headlines, but will also look to FOMC minutes on Wednesday and a number of Fed speakers throughout the week for direction.

"We expect investors to remain skittish as trade concerns linger, keeping rates at the lower end of the recent range."

Elsewhere, Trump warned Iran to stop threatening the US and not rise to conflict or it would "end" the Islamic Republic.

As tensions between both countries escalate, Trump tweeted on Sunday: "If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!"

The US had deployed additional warships and planes to the Gulf in recent days as tensions between both sides escalated after the President vowed to block Iran from developing nuclear weapons.

In corporate news, Boeing was flying lower in pre-market trading after European airline Ryanair cited 737 MAX issues as a cause of its own profit warning.

Chipmakers Xilinx, Intel, Qualcomm and Broadcom were all down ahead of the open after the firms were forced to halt the supply of their critical software and hardware components to Huawei.

Slot machines manufacturer International Game Technology will post its first-quarter earnings before the opening bell.

In terms of major economic data, the Federal Reserve's National Activity Index will be posted at 1330 BST.

Chairman Jerome Powell will address the Atlanta Fed's Financial Markets Conference at 1800 BST.

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