E-mini S&P 500 Futures (June): Settled at 2937, down 31.50
E-mini Nasdaq-100 Futures (June): Settled at 9355.75, down 129.75
U.S equity benchmarks were paring overnight losses ahead of the bell and long Memorial Day weekend. China began its yearly National People’s Congress with the objective of showcasing the strength and leadership within the Chinese Communist Party. Beijing has used the onset to shoot 2 birds with 1 stone, Hong Kong and U.S.-China trade. Late yesterday, China’s Foreign Ministry accused Hong Kong of, “Colluding with external forces to carry out acts of secession and subversion." Today, they promised to crackdown by announcing a plan to impose new security laws to toughen control. At the same time, this pokes the deteriorating U.S.-China relationship, pressuring the U.S to step in. This comes a day after President Trump called out China for their disinformation and propaganda attacks on the U.S., and Europe. The Hang Seng lost 5.56% and closed on the lows. The Shanghai Composite lost 1.89%. The S&P 500 lost as much as 1%, but the landscape stabilized once Europe opened and Asia began to close. The German DAX gained 2.2% from its opening low.
Not all risk-assets have recovered so smoothly after China dropped its official GDP target for the first time in some 3 decades. On the heels of a stealth run this week, Copper futures are 3.5% off yesterday’s high. The Aussie dollar lost ground and crude oil is battling back after overnight weakness. The U.S. dollar has strengthened along with U.S. Treasuries and gold.
The ECB Minutes signaled the central bank is prepared to expand bond purchases when they meet on June 4. Retail sales in the U.K. were a touch below dismal expectations and that from Canada was a bit better. The economic calendar is otherwise quiet, but today’s tape may not be as traders and investors shore up positions ahead of the long weekend with the S&P 500 struggling below critical technical levels.
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