China and US agree to extend trade tariff truce, says Li
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* Rate-sensitive banks shares fall
* FAANG stocks slip
* Futures down: Dow 0.55%, S&P 0.56%, Nasdaq 0.62%
(Adds comment, details; Updates prices)
By Medha Singh
Aug 12 (Reuters) - Wall Street was set to open lower on
Monday, as investors shunned risky bets on fears that a
drawn-out trade war between the United States and China could
force the global economy into recession.
The three main indexes ended marginally lower last week,
wrapping up five days of high volume trading marked by wild
swings, as investors feared that a slide in China's yuan would
expand the scope of the trade war to include currencies.
President Donald Trump said on Friday he was not ready to
make a deal with China, pouring cold water on any hopes that the
dispute would end soon. Trump's pledge to tax the remaining $300
billion worth of Chinese imports goes into effect on Sept
1. "It appears to me that the U.S. and China are pulling
further apart on trying to reach an agreement," said Randy
Frederick, vice president of trading and derivatives for Charles
Schwab in Austin.
"If he (Trump) postpones that date (Sept. 1), we may get a
short period of calm but as long as that issue of new tariffs is
floating around out there, pending at some point, I think this
volatility is going to remain."
Over the weekend, Goldman Sachs Group Inc GS.N said fears
of the U.S.-China trade war leading to a recession were growing
and that it no longer expected a trade deal before the 2020 U.S.
presidential election. Highlighting the fallout of the trade dispute on global
growth, a survey by Germany's Ifo economic institute on Monday
showed the economic outlook for third quarter has deteriorated
worldwide. Trade-related worries have been a major drag on the
benchmark S&P 500 .SPX , which has slipped 3.7% from its
all-time high hit in July.
At 8:27 a.m. ET, Dow e-minis 1YMcv1 were down 144 points,
or 0.55%. S&P 500 e-minis EScv1 were down 16.25 points, or
0.56% and Nasdaq 100 e-minis NQcv1 were down 47.25 points, or
0.62%.
Investors seeking safety in perceived safe havens bolstered
the Japanese yen, gold prices and U.S. government bond prices.
Bank of America Corp BAC.N , Citigroup Inc C.N , Goldman
Sachs GS.N and Morgan Stanley MS.N fell nearly 1.2% each in
premarket trading, as lower bond yields hit shares of
interest-rate sensitive lenders.
The so-called FAANG group - Facebook Inc FB.O , Amazon.com
Inc AMZN.O , Apple AAPL.O , Netflix Inc NFLX.O and
Google-parent Alphabet Inc GOOGL.O - which have led the market
rally this year, slipped between 0.7% and 1%.