Stock futures point to a negative open
U.S. stock index futures dipped on Monday as renewed trade tensions between Washington and Beijing dampened sentiment.
On Sunday, President Donald Trump said his administration would soon publish a conclusive report to reveal what they believe was the cause of the COVID-19 pandemic.
“We will be giving a very strong report on what we think happened, and I think it will be very conclusive,” the president said during a virtual town hall meeting hosted by Fox News on Sunday. “Personally, I think they [China] made a very horrible mistake. They tried to cover it, they tried to put it out.”
Asked if he will use trade tariffs to punish China, Trump said they would be “the ultimate punishment.” “Tariffs at a minimum are the greatest negotiating tool,” he said.
Earlier, U.S. Secretary of State Mike Pompeo also accused the Chinese government of covering up the release of the virus from a laboratory in Wuhan. “I can tell you that there is a significant amount of evidence that this came from that laboratory in Wuhan,” Pompeo told ABC.
By 5:30 a.m. ET, the blue-chip Dow futures plummeted 355.5 points, or 1.51% to 23,263.5. S&P 500 futures fell 37.63 points, or 1.33%, to 2,784.12 while the tech-heavy Nasdaq 100 futures were down 97.50 points, or 1.12% to 8,620.5.
Crude futures lower on U.S.-China tensions
Crude futures also tumbled early Monday hurt by worries of a supply glut and Trump’s threat to slap new tariffs on China as punishment for the spread of COVID-19 worldwide.
As of 5:30 a.m. ET, U.S. West Texas Intermediate (WTI) crude futures were down $1.53, or 7.74%, at $18.27 a barrel. International Brent crude futures fell 75 cents, or 2.84% to $25.69 per barrel.
Pandemic forces the Oracle of Omaha to dump airline stocks
In other news, Warren Buffett’s Berkshire Hathaway (NYSE: BRK.B, BRK.A) has sold the entirety of its position in the U.S. airline industry due to the COVID-19 pandemic.
Buffet told shareholders over the weekend that the conglomerate has sold its entire stakes in Delta Air Lines (NYSE: DAL), Southwest Airlines (NYSE: LUV), American Airlines (NASDAQ: AAL), and United Airlines (NASDAQ: UAL).
“We have sold the entire positions. When we change our mind, we don’t take half measures or anything of the sort,” the so-called Oracle of Omaha said in during a virtual address to shareholders. “The airline business — and I may be wrong and I hope I’m wrong — I think it has changed in a very major way.”
