The Friday Market Minute

  • Global stocks extend declines as weaker-than-expected data from Beijing to Berlin suggests increasing economic damage from the world's ongoing trade war.
  • China retail sales fall the most in five year, while industrial output sinks, offsetting a formal decision from officials to slash tariffs on imported U.S-made automobiles.
  • European stocks slump, with Germany leading the declines, as weaker private sector data and ongoing political turmoil saps sentiment.
  • U.S. stocks pressured by global trade concerns and a record exodus from U.S. equity mutual funds, with Dow futures indicating a 250 point opening bell decline.

Market Snapshot

Global stocks extended declines Friday as weaker-than-expected data from Europe to China suggested the worldwide trade war is taking its toll on some of the biggest economies and setting up markets for a grim few weeks heading into the end of the year.

Beijing's late-hour olive branch to the United States, in the form of an official reduction in tariffs on cars made in America and imported into China, failed to steady investor sentiment that had been rattled by the weakest retail sales data in more than five years from the world's second-largest economy.

China said it will suspend tariffs on $126 billion worth of cars and part imports from the U.S. for at least 90 days, including the 25% levy place on cars and trucks imported into the world's biggest carmaket. 

Private sector business activity in Europe was also weakening into the final month of the year, IHS Markit said Friday, less than 24 hours after the European Central Bank trimmed growth and inflation forecasts for the world's biggest economic bloc.

U.S. equity futures were further pressured by data from Lipper that showed the biggest one-week exit from equity mutual funds on record, as $46 billion poured out of stocks and a further $13 billion streamed out of bond investments amid deepen uncertainty over the fate of U.S> markets.

Contracts tied to the Dow Jones Industrial Average I:DJI indicate a 250 point opening bell decline for the 30-stock average while those think the S&P 500 I:GSPC suggest a 20-point pullback for the broader benchmark. Nasdaq Composite I:IXIC futures are guiding to an opening bell decline of around points.

Starbucks (SBUX) - Get Report shares were an early mover in pre-market trading, falling 3.8% to indicate an opening bell price of $64.38 after the coffee chain's investor day in New York yesterday highlighted plans for rapid growth in China.

Starbucks said it plans to expand its store footprint in the world's second-largest economy by 6,000 stores over the next four years, nearly double it current total, and will open a so-called "virtual" store that utilizes both its own app and those of online e-commerce giant Alibaba Group Holding (BABA) - Get Report , a tie-up CEO Kevin Johnson once described as "rocket fuel" for the group's growth strategy.

European stocks were notably weaker across the board as investors dumped shares amid concerns over growth and trade, especially in export-focused markets such as Germany, where the DAX performance index shed 1.05% to take its December decline closer to 4% and drag the benchmark within a whisker of bear market territory.

In Britain, the FTSE 100 failed to take advantage of a weaker pound and booked a 0.81% decline by mid-day as Prime Minister Theresa May spent her second day at a European leaders' summit attempting to extract concessions on her unloved Brexit deal in order to win support from lawmakers in London.

Away from equities, the bearish tone of Friday trading lifted the U.S. dollar index, which tracks the greenback against a basket of six global currencies, 0.4% higher to 97.51 and taking it to its best weekly gain in more than 2 months. 

Global oil prices were also on the back foot Friday, with investors citing both record U.S. production of 11.7 million barrels per day, as reported by the Energy Information Administration earlier this week, as well as weaker data from China, the world's biggest energy consumer, as offsetting both OPEC production cuts and International Energy Agency 2019 demand forecasts.

Brent crude contracts for February delivery, the global benchmark, were marked 52 cents lower from their Thursday close in New York and changing hands at $60.93 per barrel while WTI contracts for January delivery, which are more tightly liked to U.S gas prices, were 34 cents lower at $52.22 per barrel.