Stock Futures Fall on Weak Chinese Trade Data
NEW YORK (TheStreet) -- Stock futures were pointing to a lower open Friday as weak Chinese trade data provided more signs that the global economy is losing steam.
Futures for the Dow Jones Industrial Average were falling 54 points, or 37.19 points below fair value, to 13,084. Futures for the S&P 500 were down 6.89 points, or 5.69 points below fair value, at 1394. Futures for the Nasdaq 100 were down 10.75 points, or 9.71 points below fair value, at 2707.
Data from China's General Administration of Customs showed the country's exports grew a mere 1% in July from a year ago, falling significantly short of forecasts for an 8.6% increase, according to a Reuters poll. Imports grew just 4.7%, far below expectations of a 7.2% rise.
On Thursday, data showed that industrial production in China fell to 9.2% in July from 9.5% in June, its lowest rate since May 2009.
"Clearly, the sluggish export sector was another factor behind the weaker-than-expected industrial production data yesterday," said Yao Wei, a China economist at Societe Generale. "We think July data probably was not the bottom."
"And worse still, there seems to be very little Beijing can do to revive export growth. During a synchronized global slowdown, any unilateral action, such as export subsidies and currency depreciation, could risk trade disputes. The hope that external demand will underpin China's economy is ever more diminished, which makes the task of domestic economic rebalancing ever more urgent."
Wei said he thinks that in the very short term Beijing will make one more attempt to revive market confidence, mostly likely with an imminent 50-basis point reserve ratio requirement cut.
On the U.S. economic front, the Labor Department reported a 0.6% decline in import prices in July and a 0.5% increase in export prices. Economists had forecast a 0.1% rise in import prices and an unchanged reading for exports, according to Reuters.
September crude oil futures were off 99 cents at $92.37 a barrel and December gold futures were down $8.20 at $1,612 an ounce.