Wall Street to open lower on trade deal doubt, bond market nerves

Asia shares sink after Wall Street sell-off

Asia shares sink after Wall Street sell-off

The S&P 500 Index lost 90.31 points, or 3.2%, while the Nasdaq Composite dropped 283.09 points, or 3.8%. Tuesday's bearish market erased the 420 point rally on Monday after a major selloff.

On Tuesday, President Trump has declared himself a "Tariff Man" in tweeting about the state of progress with China, doubling down the threat to raise tariffs on Chinese goods if a deal isn't solidified. Citigroup fell 5.4 percent to $61.63.

The S&P 500 is up 26.45 points, or 1 per cent. The falls came on the back of doubts of a trade deal being reached between the U.S. and China.

Wall Street tumbled more than 3 percent on Tuesday, led lower by bank and industrial shares, as the USA bond market sent unsettling signs about economic growth and investors anxious anew about global trade.

"It's fears about the inverted yield curve and what that means for the economy and is it a precursor to a recession", said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. The yield on the benchmark 10-year Treasury note fell to its lowest level in three months, signaling that the bond market is anxious about long-term economic growth.

Encana Corp. lost 3.6 per cent, while Crescent Point Energy Corp. was down 2.3 per cent.

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U.S. Treasury Secretary Steven Mnuchin and President Donald Trump's top economic adviser, Larry Kudlow, dialed back expectations and added qualifiers when asked about the weekend agreement between Trump and Chinese President Xi Jinping. -China trade truce reached over the weekend wasn't all it was cracked up to be.

US markets remained closed on Wednesday as part of a National Day of Mourning for the passing of former 41st President George H.W. Bush. "Financial markets are increasingly showing signs of fear of a recession". Though the S&P 500 Index closed higher on the suspension of tariff escalation, futures retreated Tuesday. That seemed to counter Fed Chairman Jay Powell's remarks last week.

FED WATCH: Markets got jolt from remarks by the president of the Fed's NY regional bank.

The jitters helped drive demand for government bonds today, pushing prices higher. Australia's S&P/ASX 200 lost 0.2 percent to 5,657.70, while South Korea's Kospi sank 1.6 percent to 2,068.69. The slide in bond yields, which affect interest rates on mortgages and other consumer loans, weighed on bank stocks.

Oil prices headed higher ahead of an OPEC meeting on Thursday, where members are expected to agree to cut output in 2019. Brent crude, the global standard, added 0.9 percent to $62.22 per barrel in London. The euro was little changed at $1.1342. Toll's shares rose 0.4 percent to $33.67, recovering from a morning sell-off.

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