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U.S. stock futures point lower, threatening Wall Street's 4-day winning streak

MARKETWATCH 6:54 AM ET 1/10/2019

China data shows weak consumer, producer prices

U.S. stock futures fell on Thursday, suggesting a winning run for equities could come to an end as optimism over trade talks was replaced by worries about a Chinese economic slowdown and the continuing government shutdown.

How are major benchmarks faring?

Dow Jones Industrial Average futures fell 102 points, or 0.4%, to 23,728, while S&P 500 futures dipped 14.1 points, or 0.5%, to 2,568.50 and Nasdaq-100 futures fell 41.75 points, or 0.6%, to 6,563.

On Wednesday (http://www.marketwatch.com/story/stock-futures-point-to-fourth-day-of-gains-on-continued-us-china-trade- optimism-2019-01-09), Dow industrials rose 91.67 points, or 0.4%, to 23,879.12, while the S&P 500 climbed 10.55 points, or 0.4%, to 2,584.96. The Nasdaq Composite Index advanced 60.08 points, or 0.9%, to 6,957.08. It was the fourth straight winning session for all three indexes.

The S&P 500 and the Dow are moving closer to exiting correction territory (http://www.marketwatch.com/story/dow-and- sp-500-are-on-the-brink-of-exiting-correction-territory-2019-01-09), but only if a recent winning streak continues -- the Dow and S&P each logged four consecutive positive sessions as of Wednesday.

Read:The stock market is too damaged for a sustained rally, strategist says (http://www.marketwatch.com/story/the- stock-market-is-too-damaged-for-a-sustained-rally-strategist-says-2019-01-09)

What's driving the market?

Stocks rose Wednesday after U.S. and Chinese officials cited progress over three days of trade talks in Beijing, though some observers cited a lack of details or even solid developments. Replacing that optimism though, were fresh concerns over China's economy after data showed a sharp slowdown in consumer and producer prices. (http:// www.marketwatch.com/story/chinas-sluggish-prices-raise-deflation-fears-2019-01-10-24851247)

Another worry for investors is the partial U.S. government shutdown, with a stalemate entrenched after President Donald Trump walked out of a border-wall meeting (http://www.marketwatch.com/story/trump-today-president-keeps-border- emergency-option-on-table-as-he-meets-with-lawmakers-2019-01-09) with Democrats on Wednesday, and said he may still declare a national emergency in order to build a wall on the border with Mexico.

Federal Reserve Chairman Jerome Powell and his top deputy Vice Chairman Richard Clarida will be in the spotlight Thursday. Powell will appear in a moderated discussion at the Economic Club of Washington at 12:20 p.m. Eastern Time, while Clarida will speak to the Money Marketeers of New York University at 5:30 p.m.

Stocks were boosted Wednesday by signs the Fed is cautious about further interest rate increases, via minutes of the December policy meeting. Comments from other Fed officials speaking Wednesday backed up that view.

Read:Fed chatter confirms interest rates on hold until May at earliest (http://www.marketwatch.com/story/fed-chatter- confirms-interest-rates-on-hold-until-may-at-earliest-2019-01-09)

What are analysts saying?

"Equity markets around the globe are in negative territory on Thursday, with the U.S. seen following suit, but that's nothing to be concerned about with the drop coming after a good run of gains across stock markets," said Craig Erlam, senior market analyst at Oanda, in a note.

"It's been an impressive rebound over the last week or so, made all the more encouraging by the fact that it's been supported by some genuine positive headlines. While specifics are lacking, talks between the U.S. and China appear to be going well, as the Chinese foreign ministry confirmed on Thursday. This is very good news for investors as it represents one of the primary risks for markets," he said.

How are other markets trading?

()Asia stocks (http://www.marketwatch.com/story/asian-markets-mixed-as-china-inflation-data-offsets-trade-talk-hopes- 2019-01-09) were mixed, with Japan's Nikkei down 1.2%, while shares in Shanghai slipped 0.4%. Stocks are under pressure in Europe, with the Stoxx Europe 600 down 0.4%.

Oil prices pulled back along with equities, with the U.S. benchmark down 0.8% to $51.94 a barrel, while gold futures rose and the ICE U.S. Dollar Index (http://www.marketwatch.com/story/dollar-set-to-take-cue-from-fed-speakers-minutes- of-december-meeting-2019-01-09)eased back.

-Barbara Kollmeyer; 415-439-6400; [e-mail]


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