Stocks were headed for another defensive open Friday as Thursday's Federal Open Market Committee statement continues to plague Wall Street. Coupled with worrisome economic data from China, fears of slowing global growth and lackluster corporate guidance, US stock futures were measurably lower with the Dow indicated to open down by more than 100 points.
Futures were building on early losses after wholesale prices increased significantly more than expected last month, giving the Fed additional ammunition to keep raising interest rates. The producer price index lunged 0.6% in October and was up 2.9% on an annual basis, beating expectations for a modest increase of 0.2% and 2.5%, respectively.
Excluding the volatile food and fuel segment, producer prices were up 0.5% and 2.6% annually, above +0.2% and 2.3% estimates, respectively.
The Fed's decision to continue with gradual rate hikes despite October's bloodbath and President Donald Trump's criticism continued to reverberate through overseas markets, especially for hard-hit emerging markets. Compounded by a 12% drop in Chinese auto sales and risks for more bad loans after Chinese regulators eased the standards for private loans, the Shanghai continued to decay, taking Asian and European bourses lower in sympathy.
Risk aversion permeated US markets with industrials and energy shares taking the brunt amid concerns about slowing Chinese economic growth and increased US oil production. Brent crude oil futures fell to their lowest level in seven months while West Texas Intermediate, down for 10 straight days, slid below $60 per barrel for the first time since March.
On the earnings front, Disney ( DIS ) handily beat Wall Street's expectations as revenue jumped to $1.48 per share on a 12% gain in revenue.
-Dow Jones Industrial down 0.50%
-S&P 500 futures down 0.55%
-Nasdaq 100 futures down 0.83%
Nikkei down 1.05%
Hang Seng down 2.39%
Shanghai Composite down 1.39%
FTSE-100 down 0.60%
DAX-30 down 0.17%
PRE-MARKET SECTOR WATCH
(-) Large cap tech: Lower
(-) Chip stocks: Lower
(-) Software stocks: Lower
(-) Hardware stocks: Lower
(-) Internet stocks: Lower
(-) Oil stocks: Lower
(+/-) Biotech stocks: Flat
(-) Drug stocks: Lower
(-) Financial stocks: Lower
(-) Retail stocks: Lower
(-) Industrial stocks: Lower
(+/-) Airlines: Mixed
(-) Autos: Lower
(+) AWX (-21.47%) Reported upbeat Q3 results
(+) FNSR (+20.76%) To be acquired by II-VI ( IIVI ) for approximately $3.2 billion
(+) HTZ (+16.39%) Q3 results beat expectations
(+) DBX (+8.57%) Q3 EPS and sales beat estimates
(-) YELP (-31.03%) Q3 sales miss estimates, lowers FY18 sales guidance
(-) PBPB (-13.78%) Reported disappointing Q3 results, guides FY18 below street view
(-) ATVI (-13.28%) Q3 results miss expectations, issues weak outlook