Wall Street set to slip after U.S. law on Hong Kong rekindles trade fears

Wall Street set to slip after U.S. law on…

(Reuters) – U.S. stocks were set to open lower for the first time this week on Friday, as trade tensions resurfaced after China rebuked President Donald Trump’s decision to ratify a bill backing protesters in Hong Kong.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., November 18, 2019. REUTERS/Brendan McDermid

The legislation knocked global stocks off near-record highs on Thursday, when U.S. markets were closed for Thanksgiving Day.

Wall Street has notched all-time closing highs in every session so far this week on upbeat domestic data and hopes of an imminent “phase one” trade deal.

But sentiment took a hit after China said on Thursday it would take “firm counter measures” if the United States continues to interfere in Hong Kong.

These could include barring drafters of the legislation from mainland China, Hong Kong and Macau, the editor of China’s state-backed Global Times tabloid said in a tweet.

“It is definitely a concern that the signing of the Hong Kong bill will be seen as an impediment to an agreement,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

“At this point, investors are also using this as an opportunity to take some profits.”

The tariff war between the world’s top two economies has dented business sentiment and become the biggest risk to global growth. The next round of U.S. tariffs is due to take effect on Dec. 15 on Chinese goods including Christmas decorations.

U.S.-listed Chinese stocks were trading lower before the opening bell, while trade-sensitive chipmakers including Micron Technology Inc (MU.O) and Nvidia Corp (NVDA.O) dipped between 0.5% and 0.8%.

At 8:17 a.m. ET, Dow e-minis 1YMcv1 were down 57 points, or 0.2%. S&P 500 e-minis EScv1 were down 5.75 points, or 0.18% and Nasdaq 100 e-minis NQcv1 were down 22 points, or 0.26%.

Trading volumes are expected to be light as the stock market closes early on Friday.

Shares of PG&E Corp (PCG.N) fell 6.6% after a report that U.S. bankruptcy judge Dennis Montali sided with wildfire victims, who said the company was subject to a doctrine known as “inverse condemnation” that holds utilities strictly liable for covering the costs of wildfires.

In a bright spot, Tech Data Corp (TECD.O) jumped 12% as private equity firm Apollo Global Management (APO.N) raised its bid for the U.S. information technology equipment distributor to about $5.14 billion.

Reporting by Arjun Panchadar and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur

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