Stock futures down
S&P 500 futures point to an 18-point loss at the open after a 13-point decline yesterday.
A couple of stories are doing the rounds. One says that the Trump administration is moving ahead with possible restrictions on capital flows into China, including investments from US government pension funds.
This follows a similar story about capital controls that the White House dismissed as ‘fake news’.
According to people familiar with the meeting, the administration’s focus is now on ways to further scrutinize index providers’ decision to add Chinese firms they consider a material risk for American investors. It’s still unclear what legal authority the White House would rely on to force major indexes to drop certain Chinese companies.
A separate report from the SCMP says China is already considering a plan to cut short its stay in Washington by one night and that Beijing is subtly toning down expectations. “There’s not much optimism,” a source was quoted as saying.
Another hint is Liu He’s official title for the visit, according to the report:
“On this occasion, which is the 13th round of talks between the two
sides, Liu will not carry the title of “special envoy” for President Xi
Jinping, an early indication that the 67-year-old vice-premier has not
been given any particular instructions from China’s leader.”
Given all this, it’s surprising that stock futures are only 0.65%.