(Bloomberg) -- U.S. stock-index futures erased earlier gains after a gauge for manufacturing output in China fell into contraction territory for the first time since May 2017, fueling global growth concerns.
March contracts on the S&P 500 Index fell 0.6 percent as of 10:37 a.m. in Hong Kong, after a closely watched gauge of Chinese manufacturing had its lowest reading since May 2017. Nasdaq 100 Index futures and those on the Dow Jones Industrial Average slid 0.6 percent each.
The closely watched Caixin Media and IHS Markit China’s December manufacturing purchasing managers’ index fell to 49.7 from 50.2 in November, below the 50 threshold for the first time since May 2017. That follows the official gauge that fell into the same zone for the first time since July 2016 on Monday.
Adding to global growth concerns, Singapore’s export-reliant economy grew an annualized 1.6 percent in the three months through December from the third quarter, easing from a revised 3.5 percent gain previously, according to an advance estimate from the Ministry of Trade and Industry Wednesday. The median forecast in a Bloomberg News survey of economists was for a 3.6 percent expansion.
“The disappointment that came through in December has transferred into January as well,” said Jingyi Pan, a Singapore-based market strategist at IG Asia Pte. While there was some small development in uncertain Washington politics, it’s a reminder of the U.S.-China trade tensions and “brings back to the surface worries on growth,” she said.
A fourth quarter sell-off in American equities sent the benchmark to the brink of a bear market late last year as fears of a recession crept up amid intensified U.S.-China trade tensions and a fourth rate hike by the Federal Reserve. The S&P 500 Index closed out 2018 with a 6.2 percent decline, finishing just above 2,500 and ending its worst year since the 2008 financial crisis amid worries the global economy will weaken in 2019.
FedEx Corp (NYSE:FDX). last month slashed its profit forecast just three months after raising it, and pared its international freight capacity amid a slowdown in global trade in recent months, with leading indicators pointing to an ongoing deceleration in the near term. Caterpillar Inc (NYSE:CAT)., a bellwether of global growth, was punished by investors in October after repeating its warnings of rising costs due to higher steel prices and U.S. tariffs.
Earlier Wednesday, U.S. stock futures rose as much as 0.6 percent after President Donald Trump invited the top congressional leaders from both parties to a White House briefing on border security Wednesday and suggested he wants to “make a deal” to end the government shutdown. It’s the first sign of a possible opening for negotiations to break the stalemate over funding for the border wall.
