US open: Stocks drop as investors await Trump's China press conference
By Iain Gilbert
Date: Friday 29 May 2020
(Sharecast News) - Wall Street stocks recorded early losses at the bell on Friday as market participants awaited a news conference on US-China relations from Donald Trump.
As of 1530 BST, the Dow Jones Industrial Average was down 0.70% at 25,222.50, while the S&P 500 was 0.51% weaker at 3,014.15 and the Nasdaq Composite came out the gate 0.17% softer at 9,353.30.
The Dow opened 178.14 points lower on Friday, carrying on from losses recorded in the previous session as a dire jobless claims report, weaker-than-expected gross domestic product numbers and Trump's announcement of a press conference all weighed on sentiment.
Friday's main focus was Trump's news conference on China, the announcement for which came after Beijing approved a national security bill for Hong Kong that could potentially endanger the city's "one party, two systems" system which allows for additional freedoms that residents on mainland China don't have.
Trump simply tweeted "China!" on Friday morning but gave no indication as to what or when he planned to make an announcement.
However, White House economic advisor Larry Kudlow said that people in Hong Kong were "furious", with China, adding that the US government was also gravely upset at "what China has done in recent days, weeks and months".
"They have not behaved well and they have lost the trust, I think, of the whole Western world," said Kudlow.
On the macro front, the Personal Consumption Expenditures Price Index declined to -0.5% in April, down from -0.2% a month earlier, according to the US Bureau of Economic Analysis. On an annual basis, the PCE Price Index slumped to 0.5% from 1.3%.
Elsewhere, personal incomes in the US shot higher last month as government transfers to contain the fallout from the pandemic kicked-in.
According to the Department of Commerce, personal income growth in April jumped at a 10.5% pace month-on-month, dwarfing consensus estimates for a drop of 5.0%. Personal consumption expenditures, on the other hand, fell by a larger than expected 13.2% (consensus: -8.5%).
Still on data, business activity levels in the Chicago area continued to shrink in May, dropping at their quickest pace since March 1982, led by a drop in new orders amid lockdowns.
Market News International's Chicago Business Barometer fell from a reading of 35.4 for April to 32.3 in May. Economists' had actually been expecting an improvement to 40.0.
Lastly, the University of Michigan's Consumer Sentiment Index rose to a final May reading of 72.3 from a final April level of 71.8.
Federal Reserve chair Jerome Powell will deliver a speech at 1600 BST.
In corporate news, Salesforce shares were down after the firm issued some weak second-quarter guidance, while bank stocks were mostly down.
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