Stock futures traded higher in a quiet premarket session Monday, despite monthly data showing a sharp slowdown in New York region business activity.
Futures for the Dow Jones industrial average rose 0.1% above fair value. Nasdaq 100 futures climbed 0.3% and S&P 500 futures clung to a fractional gain.
An odd session in China left Hong Kong’s Hang Seng index up 0.3% and the Shanghai Composite with a 1.4% loss. Shanghai’s markets tumbled, led by the tech-heavy ChiNext exchange, after a weekend meeting showed regulators committed to stepping up markets controls in order to reduce financial risk. The ChiNext index dropped 5%.
Official data showed China’s economy growing at a slightly better-than-forecast 6.9% in the second quarter, equal to first-quarter expansion. China’s retail sales growth also accelerated, up 11% and above forecasts in June. Factory output was much stronger than expected, up 7.6% for June vs. consensus views for a 6.5% increase.
China Stocks Steady, Procter &Gamble Leads Dow
Europe’s markets were mildly mixed: London’s FTSE 100 popped 0.6% and the CAC-40 added 0.1%, while Frankfurt’s DAX struggled with a 0.2% decline near midday. In Japan, the Tokyo’s Stock Exchange was closed for the country’s Ocean Day holiday.
Despite Monday’s shakeup on China’s markets, futures for China-based plays in the U.S. were unrattled. Alibaba Group Holdings (BABA), Baidu (BIDU), JD,com (JD) and Sina (SINA) all traded higher. Weibo (WB) jumped 2% ahead of the open. The microblogging site ended Friday below an 82.38 buy point in a seven-week base.
Dow stocks traded in a tight range, flat to higher. Procter & Gamble (PG) jumped 0.6% to lead the index, after reports that billionaire and activist investor Nelson Peltz was pursuing a seat on the company’s board of directors.
A number of IPOs were under early pressure, Blue Apron (APRN) tumbled 5% and Ferrari (RACE) slipped 0.9% in premarket action. SnapSNAP gained 0.9% and SquareSQ added 0.3%. Square posted a 12% gain last week, breaking out past a 25.07 buy point in a flat base, lifted by speculation that it might be a takeover target for PayPal (PYPL). PayPal rose 0.8% in premarket trade.
New York Region Manufacturing Hits The Brakes
Manufacturing growth in the New York region has slowed sharply in July, according to the New York Federal Reserve, which marked down its Empire State Manufacturing Survey to 9.8 for the month vs. a 19.8 reading in June.
New orders and shipments were down, and delivery times lengthened. Employment rose slightly, but hours worked remained unchanged, suggesting employers are not adding shifts or overtime to meet demands.