Off The Wire
Recession fears hit Wall Street after grim China, German data
(Reuters) - Wall Street was set to open lower on Wednesday, as poor economic data from China and Germany put the focus back on the impact of a bruising Sino-U.S. trade war which is pushing some major economies toward the brink of recession.
The outlook for Germany’s export reliant economy was also grim and Chinese industrial output growth cooled to a more than 17-year low, adding to headwinds for U.S. multinationals that rely on global demand.
The U.S. bond market showed red flags, with two-year Treasury yields rising above those for 10-year paper for the first time since 2007, pointing to the risk of recession.
Wall Street’s main indexes surged more than 1.5% on Tuesday after Washington delayed the introduction of tariffs on some Chinese consumer goods.
Futures pointed to a drop of about 1% at the open on Wednesday.
“It’s almost as if global investors either don’t buy the tariff delay as a sign of real progress in the U.S.-China trade war or have been too consumed by further evidence of global economic weakness to care,” BMO Capital Markets strategist Stephen Gallo said.
At 7:00 a.m. ET, Dow e-minis 1YMcv1 were down 239 points, or 0.91%. S&P 500 e-minis EScv1 were down 25.5 points, or 0.87% and Nasdaq 100 e-minis NQcv1 were down 75.25 points, or 0.97%.
Interest-rate sensitive lenders were among notable losers before the bell. Bank of America Corp (BAC.N), Citigroup Inc (C.N), JPMorgan Chase & Co (JPM.N), Goldman Sachs (GS.N), Wells Fargo & Co (WFC.N) and Morgan Stanley (MS.N) were all down between 1.5% and 2.4%.
Reporting by Medha Singh in Bengaluru; Editing by Anil D'Silva