Dow Jones futures tumbled Tuesday morning after President Donald Trump said he has instructed the U.S. Trade Representative to identify another $200 billion in Chinese goods for tariffs, ratcheting up the U.S.-China trade war. S&P 500 futures and Nasdaq futures also retreated.
XThe Dow Jones industrial average fell for a fifth straight session on Monday on China trade war fears, while the S&P 500 index dipped. But the Nasdaq composite edged higher, just below record levels. Several techs broke out Monday, including Google parent Alphabet (GOOGL), Box (BOX), Autodesk (ADSK) and recent China IPO Sogou (SOGO).
President Trump late Monday said in a White House statement that the 10% duties on $200 billion in Chinese goods would go forward if Beijing doesn't change its "unfair practices" and "insists on going forward with the new tariffs that it has recently announced," the president said in a statement provided by the White House late on Monday.
Trump added that if China retaliates against those duties, the U.S. would impose duties on yet another $200 billion in Chinese goods.
On Friday, the U.S. said it would slap a 25% tariff on $50 billion of Chinese imports, with some $34 billion kicking in on July 6. That same day, China said it would impose $34 billion in retaliatory tariffs.
Previously, Trump had threatened to impose tariffs on $100 billion Chinese goods if Beijing retaliated.
Separately, the Senate voted 85-10 to reinstate stiff penalties vs. China telecom giant ZTE Corp., adding them to a defense spending bill. It's a repudiation of President Trump's deal to revive ZTE, which shut down as sanctions barred U.S. companies from doing business with the Chinese firm.
Dow Jones Futures Today
Dow Jones futures sank 1.5% vs. fair value, signaling a Dow Jones move below its 50-day moving average at the open. S&P 500 futures retreated 1.2%. Nasdaq 100 futures tumbled 1.4%. Stock market futures often do not translate into how the Dow Jones and other major averages actually trade in the next regular session. But this is not a good sign.
Top Stocks Hitting Buy Zones
Alphabet and Sogou, a search engine spinoff from Chinese portal Sohu.com (SOHU), closed in buy range. Box and Autodesk entered buy zones intraday but closed just below their entries. Volume was strong for Sogou, Box and Autodesk, but sluggish for FANG stock Google.
Alphabet stock boasts a 97 Composite Rating while Sogou stock has a best-possible 99 CR. Autodesk stock has an OK 73, but the maker of computer-aided-design software is transitioning to a cloud-computing subscription model that has hurt earnings temporarily. Box stock, at a 73 CR, is still unprofitable, but the cloud-based storage firm is narrowing losses with expectations for profits by 2020.
Alphabet Stock
Alphabet stock rose 2.1% to 1,183.58 in Monday's stock market trading. That cleared a handle buy point in a double-bottom base. Google's parent also cleared an alternate entry of 1,178.26 from the middle of the W in the consolidation.
But Alphabet stock volume was 18% below normal, suggesting a lack of conviction buying by institutional investors.
On the upside, Alphabet's relative strength line, which tracks a stock's performance vs. the S&P 500 index, hit a new high. Alphabet's RS line hasn't made much progress in more than a year.
Google stock fell 1.2% in Tuesday's premarket.
Box Stock
Box stock shot up about 7% to 28.64 in volume that was 92% above normal. Shares rose as high as 28.91 intraday, briefly clearing a 28.78 base-on-base consolidation. Box's strong action Monday follows last week's powerful breakout by Dropbox (DBX). Dropbox, a recent IPO, rallied 6% on Monday.
Box stock fell 1.6% in the premarket.
Sogou Stock
Sogou stock rocketed 11.4% to 15.43, clearing a 14.80 cup-base entry in volume that was 594% above normal. Coming public at 13 last November, Sogou hit 14.70 intraday in its Nov. 9 debut, and then quickly sold off, hitting 7.91 in early April. But shares have rebounded, skyrocketing 62% in June alone.
Sogo retreated 2.7% before the topen.
Autodesk Stock
Autodesk stock popped 2.4% to 141.26 on Monday, reaching 142.48 intraday. That briefly topped the 141.36 base-on-base buy point. Volume was 53% above normal.
Autodesk was not yet active Tuesday.
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