Dow Jones futures are in the red today, indicating that the stock market could extend its losses this week.
Futures on the Dow Jones Industrial Average (DJIA) are swimming in the red Wednesday morning as the stock market continues to look for direction as far as a U.S.-China trade deal is concerned. The stock market and the Dow avoided a heavy loss yesterday on speculation that Washington might not go ahead with the Dec. 15 tariffs.
The Trump administration is all set to impose additional tariffs of 15 percent on $160 billion worth of goods from next Sunday. The phase one trade deal looks unlikely over the next four days, so it can logically be assumed that the tariffs will eventually kick in. But then, the stock market believes that the U.S. won’t go ahead with the tariffs.
This was the reason why the Dow avoided a major loss yesterday. The Wall Street Journal reported that negotiations were on between the two countries to postpone the Dec. 15 tariffs. But that hasn’t been enough to lift the pall of gloom as Dow futures continue to swing back and forth, looking for concrete direction.
Dow Jones futures are down 41 points, or 0.15 percent, to 27,880 points at 5.15 am ET. This indicates yet another bad day ahead for the stock market as the Dow had closed 28 points lower Tuesday. Dow futures were much lower at 3.59 am ET at 27,867 points, but it looks like the possibility of a tariff postponement has given market confidence a slight boost.
S&P 500 futures are slightly in the red, down by two points. Nasdaq Composite futures are up slightly by four points or 0.05 percent. These futures data indicate that the stock market is set for an uncertain day today.
The Dow Jones has finished in the red for two consecutive days. It won’t be surprising to see the stock market record yet another day in the red going by the comments made by White House economic advisor Larry Kudlow.
Kudlow torpedoed WSJ’s speculation that the U.S. is all set to defer the Dec. 15 tariffs on Chinese goods in no uncertain terms when he said:
The reality is those tariffs are still on the table, the Dec. 15 tariffs, and the president has indicated if the short strokes remaining in negotiations do not pan out to his liking that those tariffs could go back into place.
The National Economic Council director also added that there is no “definitive decision” on the tariff rollback just yet.
President Trump might not favor the idea of postponing the Dec. 15 tariffs in case a deal is not reached as the U.S. collected massive tariffs to the tune of $7.2 billion in October, which was the highest in the country’s history. At the same time, the employment situation in the U.S. would give Trump more ammunition to go ahead with the tariffs.
The November jobs report is widely considered to be a blowout despite concerns of a discrepancy. This lays the groundwork for Trump to eventually boast of higher revenue from import taxes if he goes ahead with the tariffs this coming Sunday.
Kudlow has already warned that the danger of a fresh round of tariffs continues to hover, and if there is no postponement as the stock market anticipates, the Dow could take a turn for the worse.
Last modified: September 23, 2020 1:23 PM