The DOW clocked up a colossal 660-point loss during yesterday’s session and although that may be the twelfth largest drop in history, it’s the 10th time the US benchmark index has fallen by more than 600 points under Donald Trump’s presidency. Apple’s profit warning on Wednesday night highlighted the real consequences of the trans Pacific trade spat and investors are selling down equity positions as a result. However news has been published in recent hours stating that trade talks between the world’s two largest economies will get underway in Beijing on Monday. This has delivered some support for index futures, although given President Trump’s weakened political position at home, the Chinese can be expected to drive a hard bargain. Any lack of quick progress next week will have the potential to extend downside pressures. As of last night’s close, the DOW stood just over 1,100 points away from bear market territory.
The high point on today’s economic calendar will be the release of wage data and the non-farm payrolls for December. Yesterday’s upbeat ADP payroll report will have bolstered expectations and average wages are forecast to tick higher too. This all plays towards the Fed needing to maintain its hawkish bias into 2019 and in turn will do few favours for stocks.
Ahead of the open we’re calling the DOW up 194 at 22880 and the S&P up 23 at 2471.
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