[BRIEFING.COM] S&P futures vs fair value: -43.00. Nasdaq futures vs fair value: -138.30.
Wall Street is set to open with heavy losses after the arrest of Huawei Technologies' CFO, which has piqued worries about the U.S. and China being able to reach a trade deal in their prescribed 90-day window. The S&P 500 futures trade 43 points, or 1.6%, below fair value, and the Nasdaq 100 futures trade 2.0% below fair value.
Specifically, the United States requested the arrest and extradition of Meng Wanzhou amid allegations the company violated U.S. trade sanctions on Iran. Worries about potential retaliatory actions by China have undercut a wide range of stocks, but particularly technology issues and the stocks of companies tied into the smartphone and telecom equipment supply chains. Apple (AAPL 171.90, -4.79) is down 2.7% in pre-market trading.
Looking at other markets, U.S. Treasuries have resumed significant buying interest, pushing yields lower, amid the downturn in the futures market. The 2-yr yield is down five basis points to 2.75%, and the 10-yr yield is down four basis points to 2.88%. Also, the U.S. Dollar Index is down 0.2% to 96.93, and WTI crude is down 3.1% after Saudi Arabia's oil minister reportedly floated a proposal to cut daily production by 1 million barrels per day, which is less than the market was thinking.
Reviewing this morning's batch of economic data, which included Trade Balance for October, Revised Q3 Nonfarm Productivity and Unit Labor Costs, ADP National Employment Change for November, and weekly Initial and Continuing Claims:
- The October trade balance report showed a deficit of $55.5 billion (Briefing.com consensus -$54.7 billion). The September deficit was revised to $54.6 billion from $54.0 billion.
- Third quarter unit labor costs were revised to +0.9% (Briefing.com consensus +1.2%) from +1.2% in the preliminary reading. Meanwhile, third quarter productivity was revised to +2.3% (Briefing.com consensus +2.2%) from +2.2%.
- The ADP National Employment Report showed an increase of 179,000 in November (Briefing.com consensus 192,000), and the October reading was revised to 225,000 (from 227,000).
- The latest weekly initial jobless claims count totaled 231,000, while the Briefing.com consensus expected a reading of 225,000. Today's tally was below the revised prior week count of 235,000 (from 234,000). As for continuing claims, they decreased to 1.631 million from a revised count of 1.705 million (from 1.710 million).
As a reminder, Factory Orders for October (Briefing.com consensus -2.0%) and ISM Services for November (Briefing.com consensus 59.0) will be released at 10:00 AM ET.