Stock Futures Slip On Chips, China Data; Gold Miners, Facebook Resist Slide   Investor's Business Da
Channel: the oneprof
Date: 2019-06-14

U.S. stock futures tracked declines in overseas markets after weak data out of China stoked fears of an economic slowdown in the world’s second-largest economy. Chipmakers broadly declined following a disappointing outlook from Broadcom (AVGO).
Ahead of the opening bell, futures for the S&P 500 (ES=F) fell 0.23%, or 6.75 points, as of 8:23 a.m. ET. Dow futures (YM=F) declined 0.13%, or 35 points, while Nasdaq futures (NQ=F) fell 0.64%, or 48.25 points.
Overnight, new data from China’s National Bureau of Statistics showed softening in both industrial output and investment in the region amid ongoing trade tensions with the U.S.
Chinese industrial output growth was 5% in May, down 0.4 percentage points from the month prior and marking the slowest rate of increase since 2002.
Fixed-asset investment grew 5.6% in May, which also represented a slowdown from the four months prior and a miss compared to consensus expectations. Private sector fixed-asset investment, which comprises nearly two-thirds of total investment in China, rose 5.3%, versus a 5.5% increase in the first four months of 2019.
Meanwhile, chipmakers’ stocks on Friday saw renewed weakness after Broadcom cut its annual sales forecast Thursday, citing weaker order demand due to the U.S.-China trade war. The company now sees revenue of $22.5 billion in the 2019 fiscal year, versus the $24.5 billion guidance it provided three months ago.
“With respect to semiconductors, it is clear that the U.S.-China trade conflict including the Huawei export ban is creating economic and political uncertainty and reducing visibility for global OEM [original equipment manufacturer] customers,” Broadcom CEO Hock E. Tan said during a call with analysts Thursday. “As a result, demand volatility has increased and our customers are actively reducing inventory levels to manage risk.”
Broadcom also disclosed that sales to Chinese smartphone-maker Huawei alone contributed $900 million in revenue for the company or about 4.3% of total fiscal 2018 revenue.
Shares of Broadcom fell nearly 10% during pre-market trading.
Other U.S. chipmakers including Advanced Micro Devices (AMD) and Nvidia (NVDA) also fell as investors weighed the sector-wide impact of the U.S.-China trade tensions. The iShares PHLX Semiconductor ETF (SOXX) declined 2.9% to $184.44 during early trading.
Broadcom, Oil Prices, Chewy, Trade War, Toronto Raptors - 5 Things You Must Know U.S. stock futures decline amid tensions in the Middle East arising from the attack on two tankers in the Strait of Hormuz and weak data from China; Broadcom sinks after the chipmaker said it sees a slowdown in demand; shares of Chewy.com, an online retailer of pet food and supplies, are priced at $22 each; the Toronto Raptors win their first NBA title.
Stock Futures Fall on Rising Middle East Tensions, Weak China Data
U.S. stock futures declined on Friday amid tensions in the Middle East arising from the attack on two tankers in the Strait of Hormuz and weak data from China.
Contracts tied to the Dow Jones Industrial Average fell 52 points, futures for the S&P 500 were down 8.90 points, and Nasdaq futures slumped 61 points. Stocks rose Thursday after two days of losses as oil prices jumped following the tanker attacks.
The U.S. blamed Iran for the suspected attacks on the tankers, denouncing what it called a campaign of "escalating tensions" in a region crucial to global energy supplies.
"Taken as a whole, these unprovoked attacks present a clear threat to international peace and security, a blatant assault on the freedom of navigation and an unacceptable campaign of escalating tension by Iran," said U.S. Secretary of State Mike Pompeo.
Oil prices were lower Friday after the International Energy Agency reduced its forecast for global oil demand for the second consecutive month, to 1.2 million barrels a day this year from 1.3 million barrels a day.
Brent crude for August delivery fell 0.59% to $60.95 a barrel after a gain of 2.2% on Thursday. West Texas Intermediate contracts for July, which are more tightly linked to U.S. gas prices, were down 0.71% on Friday to $51.91 a barrel.
Meanwhile, China's industrial output growth in May slowed to 5%, below expectations of 5.5% and the weakest reading since early 2002, as the trade battle between the U.S. and China continues without a near-term settlement in sight.
The economic calendar in the U.S. on Friday includes Retail Sales for May at 8:30 a.m. ET, Industrial Production for May at 9:15 a.m. and Consumer Sentiment for June at 10 a.m.