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U.S. equity futures turned sharply red Thursday after data showed the weakest reading for December retail sales in nine years, erasing earlier gains linked to progress in trade talks between Washington and Beijing and data showing a surprise jump in January China export activity.

Retail sales fell 1.2% in December from the previous month, the Commerce Department, the biggest drop since September 2009 and well shy of the 0.2% gain that was forecast by economists. Although data was partially impacted by the 35-day government shutdown, the weakness in such a key metric of U.S. economic health -- consumer spending is responsible for around two thirds of GDP growth -- triggered sharp reversals in U.S. equity futures.

"These numbers are astonishing, and impossible to square with the Redbook chainstore sales survey, which reported surging sales in December and a record high in the week of Christmas, on the back of the plunge in gasoline prices," said Ian Shepherdson of Pantheon Economics. "

"These data are so wild that we have to expect hefty upward revisions, but if they stand, they are very unlikely to be representative of the trend over the next few months," he added. "The consumer is no longer enjoying tax cuts or falling gas prices, but that's no reason to expect a rollover."

Contracts tied to the Dow Jones Industrial Average indicate a 135 point opening bell decline while those linked to the S&P 500 suggest a 14.7 point slip for the broader benchmark head of earnings from Applied Materials (AMAT) and Nvidia (NVDA) after the closing bell.

US Retail Sales up 2.1% in the past year, slowest YoY growth since August 2016. pic.twitter.com/QuvQ24aVkG

— Charlie Bilello (@charliebilello) February 14, 2019

Cisco Systems Inc. (CSCO) shares were indicated sharply higher in pre-market trading after the network equipment maker and Dow component posted better-than-expected second quarter earnings and said growth from its newer business units would continue to drive sales over the near term.

Coca-Cola (KO) , another Dow component, slipped more than 4 % after it posted fourth quarter profits that were largely in-line with analysts' forecast, but noted that 2019 organic revenue growth would slow and comparable earnings would likely remain flat thanks in part to a stronger U.S. dollar.

The weak retail sales data followed a series of positive headlines overnight in Asia, where U.S. Treasury Secretary Steve Mnuchin told reporters in Beijing he was "looking forward to discussions today" as he headed off to meetings with China's Vice Premier, Liu He, in the Chinese capital.

President Donald Trump has said several times this week that talks are going "very well", and Bloomberg reported that he is considering expending the March 2 deadline by 60 days in order to ensure that a comprehensive deal is ultimately agreed between the world's two biggest economies.

Trade data from China's customs office was also broadly positive, with exports rising 9.1% from last year, compared to a 4.4% decline in December, offsetting another dip in overall imports of 1.5%. China's trade surplus with the United States remained elevated, at $27.3 billion, but a 42% slump in U.S. imports, led by a big decline in soybean purchases, likely adds pressure on both sides of the negotiations to reach a deal.

European stocks were also stronger at the start of trading Thursday, with the Stoxx 600 rising 0.4% to a three-month high in Frankfurt as the euro eased to 1.1266 against the U.S. dollar after data showed that while Germany narrowly avoided a technical recession over the final three months of last year, growth in Europe's biggest economy ground to a halt amid global trade tensions and uncertainty surrounding Britain's impending exit from the European Union.

The benchmark gave back nearly all of those gains after the U.S. retail sales numbers and was last seen 0.07% higher at 365.22 points.

Airbus SE (EADSY) shares traded at an all-time high after the Franco-German planemaker and key Boeing Co. (BA) rival posted stronger-than-expected fourth quarter earnings, issued a robust 2019 outlook for aircraft deliveries and said it would formally scrap it struggling A380 jump jet program.

he pound was also weaker in early London trading, sliding to 1.2844 against the greenback, with traders citing the increasing parliamentary complexity in the government's Brexit plans, which many see as raising the risk that Britain may crash out of the EU without a bespoke trade deal on March 29.

That said, the weaker pound, as well as firmer global oil prices, helped the FTSE 100 gain around 0.27% by mid-morning in London.

AstraZeneca plc (AZN) shares traded sharply higher Thursday after the U.K.-based drugmaker posted stronger-than-forecast fourth quarter earnings, and said 2019 revenues would continue to rise, thanks to increasing demand for its key cancer treatments.

Asia stocks were essentially flat on the session, however, with investors unwilling to reach for risk with so many variables outstanding on trade, politics and economic fundamentals, with the MSCI ex-Japan index slipping 0.04% from a four month high and the Nikkei 225 closing 0.02% lower at 21,139.71 even as the yen weakened to 111.06 against the U.S. dollar.

Global oil prices were also supported by the January China trade data, which showed crude imports rose 4.8% from last year to pass the 10 million barrel per day mark for the third consecutive month, suggesting government plans to stimulate growth in the world's second largest economy are well under way.

Late Wednesday, the Energy Information Administration said domestic crude inventories rose by a much-larger-than-expected 3.68 million barrels last week, taking the total to 450.84 million, the highest since November 2017. The figures offset forecasts for weaker demand and record U.S. supply from the International Energy Agency earlier in the session and sent prices higher in market around the world.

Brent crude contracts for April delivery, the global benchmark, were marked 53 cents higher from their Wednesday close in New York and changing hands at $64.11 per barrel, the highest since November 21 and a move that extends gains from the December 24 trough past 25%.

WTI contracts for March delivery -- which closed at the lowest level in two weeks earlier this week -- were seen 57 cents higher at $53.97 per barrel, the highest since February 4.