Stock Futures Slide as China's Growth Worries Return
New York (Oct 13) Stock futures slid on Thursday morning as worries over growth in China's economy returned after monthly exports tumbled.
S&P 500 futures were down 0.51%,Dow Jones Industrial Average futures fell 0.53%, and Nasdaq futures dropped 0.56%.
Exports in China moved sharply lower in September, according to the General Administration of Customs, a worrying sign of weak demand for products made in the world's second-largest economy. Exports slid 10% in September, more than three times the decline in August. Analysts had expected a far-narrower 3.2% drop. Exports have fallen for the past six months.
"If the Chinese (and other Asian exporters) are selling less, it simply means that Europeans, and Americans are buying less," Stephen Guilfoyle, chief market economist at Stuart Frankel & Co., wrote in a note. "The hope was that the Chinese economy had stabilized."
Chinese imports also made an unexpected decline, falling 1.9% in September after climbing 1.5% in August. China continues to endure a rocky transition from a manufacturing-focused economy to a consumer-driven one.
Fears over a divided Federal Reserve also dragged on Wall Street. Minutes from the central bank's September meeting released Wednesday afternoon showed a "reasonable argument" for both an interest rate hike and no change at all, shining little light on the likelihood of a December hike. A majority of Federal Open Market Committee members voted to keep rates unchanged near crises levels at the September meeting, though there were three dissenters to that decision.
A rate hike in December currently has a 60% chance of happening, according to CME Group fed funds futures. The likelihood of a December hike from the Federal Open Market Committee increased after Fed Chair Janet Yellen said in September that the case for an increase had strengthened.