The Friday Market Minute
- U.S. equity futures suggest a fifth day of declines on Wall Street Friday, the longest losing streak of the year, after a surprise collapse in China's February exports.
- China exports fall the most in three-years last month, adding to concerns for global growth after yesterday's sharp forecast change, and negative rate extension, from the European Central Bank.
- European stocks fall the most in a month on weaker growth prospects and ongoing Brexit uncertainty.
- Oil prices slump on broader demand concerns, with a stronger U.S. dollar and record U.S. production adding to downside pressure.
- Dow futures suggest an 100-point opening bell decline ahead of February payroll data that is expected to show the U.S economy added 180,000 new jobs last month.
U.S. equity futures tumbled Friday, setting up Wall Street for its worst week of the year, after a collapse in China exports last month added to concerns of a sharp global slowdown following Thursday's weaker growth forecasts from the European Central Bank.
China's February exports plunged more than 20% last year, the most in three years, as the twin impacts of the annual lunar holiday and the ongoing trade war with the United States hammered external demand. Imports, too, slumped by 5.2% as domestic demand dried up amid a broader slowdown for the world's second-largest economy.
The data, as well as comments from China's ambassador to the United States that suggests a breakthrough in trade talks remains elusive, sent shares on the Shanghai Composite to a five-month low, hiving more than 4.4% from the benchmark and pushing indices around the region sharply lower.
The selling looks set to flow through onto Wall Street Friday, with contracts tied to the Dow Jones Industrial Average suggesting a 112 point pullback and those linked to the S&P 500 indicating a 14 point pullback for the broader benchmark.
Costco Wholesale (COST) shares were a notable early market mover, rising 4.7% after it posted much stronger-than-expected second quarter earnings late Thursday but missed Street revenue estimates even as same-store sales over the holiday period were solid.
Market direction is likely to be dominated, however, by Friday's non-farm payroll report, which is expected to show U.S. employers added 180,000 new jobs last month, a figure that would be notable slowdown from the 304,000 new posts added over the month of January.
In Europe, markets were hit by both the China-led weakness and yesterday's move by the ECB to change its forward guidance by pledging to keep interest rates near zero until at least the end of the year while its slashed growth and inflation forecasts for the world's biggest economic bloc.
The moves pushed the euro to 1.1217 in early Friday trading, the weakest since June 2017, and sent stocks in the region 0.77% lower by mid-day in Frankfurt, their biggest single-day decline in at least a month.
Benchmark government bond yields were also under pressure as investors plowed into risk-free German bunds, taking benchmark 10-year paper to just 0.6%. U.S. 10-year Treasury notes, by contrast, were seen at 2.64% in early New York trading.
Global oil prices were also hit by the global growth concerns, with futures tumbling on both the China export data and the ongoing surge in U.S. production, which hit a record 12 million barrels per day last month.
Brent crude contracts for May delivery, the global benchmark, were marked $1.12 lower from their Thursday close and changing hands at $65.18 per barrel while WTI contracts for April were seen 91 cents higher at $55.75 per barrel.