US pre-open: Futures sharply lower after disappointing Chinese data

The Dow Jones Industrial Average is expected to open approximately down 115 points, while the S&P 500 and the Nasdaq are set to begin the session 14 and 32 points lower respectively.

Weak China data fuels slowdown worries

Exports in the world’s second largest economy fell 6.8% in November, their fifth straight month of decline and a sharper drop than expected, while imports were down 8.7%, slightly better than consensus calling for an 11.8% decline.

The overall trade surplus came in at 343bn yuan or $53bn.

“Chinese export numbers fell sharply to post -6.8% instead of the -5% that was expected,” said James Hughes, chief market analyst at GKFX.

“This has spooked the market a little but nowhere near as much as negative China data would have done prior to us being a little more certain about the Fed’s next decision.”

On the macroeconomic front, the NFIB small business index fell short of expectations in November, as it ticked down from 96.1 to 94.8, compared with analysts’ forecast for a 96.4 reading.

The economy expectations and earnings expectations gauges both fell three points, while the sales expectations sub-index shed five points.

“Even though there is talk that the Fed will be raising rates this month, it will hardly signal that they are feeling more optimistic about the economy,” said NFIB chief economist Bill Dunkelberg.

Still to come on the economic calendar, investors will analyse a reading on job openings for October, which is released at 1500 GMT.

In company news, Staples and Office Depot plunged 13.7% and 15.7% respectively in pre-market trading, after announcing late on Monday they would contest the US Federal Trade Commission’s decision to block Staples’s proposed acquisition of Office Depot.

Elsewhere, European stocks were on the back foot, while oil prices rebound slightly after slumping close to a seven-year low on Monday.

West Texas Intermediate was up 0.92% to $38 a barrel, while Brent crude climbed 1.59% to $41.39 a barrel.

The dollar gained 0.31% against the pound but fell 0.13% and 0.23% against the yen and the euro respectively, while gold spot gained 0.14% to $1,072.83.