Stocks Go down in Premarket as Donald Trump Signs Hong Kong Pro-Democracy Bills

UTC by Teuta Franjkovic · 3 min read
Stocks Go down in Premarket as Donald Trump Signs Hong Kong Pro-Democracy Bills
Photo: Gage Skidmore / Flickr

Dow Futures, S&P 500 and Nasdaq-100 futures started falling after Trump signed a law that expresses support for Hong Kong protesters.

Thursday started with premarket equities in fall after the U.S. President Donald Trump signed a bill supporting anti-government protesters in Hong Kong in spite of Beijing’s objections on Wednesday evening. He also signed into law the protect Hong Kong act which bars the sale of U.S.-made munitions to the city’s authorities.

Trump said:

“I signed these bills out of respect for President Xi, China, and the people of Hong Kong. They are being enacted in the hope that Leaders and Representatives of China and Hong Kong will be able to amicably settle their differences leading to long term peace and prosperity for all.”

The legislation will require a yearly review of the country’s special administrative region’s special trade status with the U.S. and will sanction Chinese officials found to be undermining the protests that have plagued the city for months.

Dow Futures fell 0.23% vs. fair value. S&P 500 futures sank also 0.23%. Nasdaq 100 futures fell 0.19% at 8:34 am CET.

However, this is the first day of the week the indexes are falling. Wednesday closed in a record (again) green after economic data showed a gain in orders of durable goods, as well as a fall in initial jobless claims. United States Bureau of Economic Analysis announced that US GDP grew at 2.1% in the third quarter while the Federal Reserve Bank (Fed) of Atlanta forecast GDP will grow at a 1.7% rate in the fourth quarter of fiscal 2019. Also, the Fed released its Beige Book saying the US economy expanded modestly in the past month and a half.

However, seems that Canaccord Genuity was right when warning investors not to “FOMO” into an overheated market.
Even though Dow Jones Industrial Average (DJIA) futures went to another record open on the stock market on Wednesday, and Trump was saying that U.S.-China trade negotiations had reached the “final throes,” Canaccord analysts say it’s not clever to start your stock Christmas shopping spree.

The investment company that has approximately $31 billion assets under management (AUM) cautioned investors not to get carried away and ‘fomo’ into the latest rally.

They said:

“While anything can happen, our indicators simply favor no.”

In this context, Tony Dwyer, an analyst at Canaccord Genuity, noted:

“The opposite appears true today. The markets are printing records, the bears are waffling, the bulls are competing over who has the higher target, and the VIX has dropped to under 12.”

Regarding the phase one, chief economist of the ICBC Standard Bank Jinny Yan said a deal is imminent. China’s annual Economic Work Conference is scheduled to assemble in the next two weeks that is an obvious sign that both sides are ready to finally agree.

Steve Okun of McLarty Associates says this has to be a win-win situation since both leaders are dealing with a humongous pressure at home.

“China has politics the same as U.S. has politics. Trump has to play to his base, Xi has to worry about his internal politics, he has to worry about his standing within the party”, said he.

And while stocks seem not to like immediate happenings, Bitcoin and the rest of the crypto market seems to love it. At the time of writing Bitcoin was jumping 5.10% to $7,511. Ethereum grew 3.45% to $152.39 while XRP climbed 2.5% to $0.23.

Stocks were falling in the premarket. Tesla went down by 0.39% to $330. Amazon stocks were falling 0.44% to $1,810 while Facebook was down 0.32% to $201.35. Netflix was down 0.20% to $315.30 and Google slid 0.082% to $1,311.

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Teuta Franjkovic

Experienced creative professional focusing on financial and political analysis, editing daily newspapers and news sites, economical and political journalism, consulting, PR and Marketing. Teuta’s passion is to create new opportunities and bring people together.

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