Recession fears hit Wall Street after grim China, German data

(Reuters) – Wall Street was set to open lower on Wednesday, as poor economic data from China and Germany put the focus back on the impact of a bruising Sino-U.S. trade war which is pushing some major economies toward the brink of recession.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 13, 2019. REUTERS/Eduardo Munoz

The outlook for Germany’s export reliant economy was also grim and Chinese industrial output growth cooled to a more than 17-year low, adding to headwinds for U.S. multinationals that rely on global demand.

The U.S. bond market showed red flags, with two-year Treasury yields rising above those for 10-year paper for the first time since 2007, pointing to the risk of recession.

[US/]

Wall Street’s main indexes surged more than 1.5% on Tuesday after Washington delayed the introduction of tariffs on some Chinese consumer goods.

Futures pointed to a drop of about 1% at the open on Wednesday.

“It’s almost as if global investors either don’t buy the tariff delay as a sign of real progress in the U.S.-China trade war or have been too consumed by further evidence of global economic weakness to care,” BMO Capital Markets strategist Stephen Gallo said.

At 7:00 a.m. ET, Dow e-minis 1YMcv1 were down 239 points, or 0.91%. S&P 500 e-minis EScv1 were down 25.5 points, or 0.87% and Nasdaq 100 e-minis NQcv1 were down 75.25 points, or 0.97%.

Interest-rate sensitive lenders were among notable losers before the bell. Bank of America Corp (BAC.N), Citigroup Inc (C.N), JPMorgan Chase & Co (JPM.N), Goldman Sachs (GS.N), Wells Fargo & Co (WFC.N) and Morgan Stanley (MS.N) were all down between 1.5% and 2.4%.

READ:  Lebanon festival cancels Mashrou' Leila show after religious pressure

Tariff sensitive chipmaker, which staged a comeback a day earlier, were also down. Micron Technology Inc (MU.O), Broadcom Inc (AVGO.O) and Nvidia Corp (NVDA.O) among others slipped more than 1%.

Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva

Heard from http://feeds.reuters.com/~r/reuters/businessNews/~3/RwVq5vMpjJE/recession-fears-hit-wall-street-after-grim-china-german-data-idUSKCN1V4172

Leave a Comment

Your email address will not be published. Required fields are marked *