Oil retreats; Business slams tariffs; Facebook goes crypto
1. The big picture on oil: US crude futures are in retreat, unwinding a rally triggered Thursday by an attack on two tankers in the Gulf of Oman.
The attacks were particularly unnerving for investors because they occurred near the Strait of Hormuz, a choke point through which 30% of the world’s sea-borne crude oil passes.
The United States has blamed Iran for the attacks, releasing a video that it says shows an Iranian navy boat removing an unexploded mine from the hull of one of the tankers. Iran has denied involvement.
But despite the escalating tension, oil prices are falling Friday and they’re on track for a weekly loss.
That shows what’s really driving the oil market right now: signs of deteriorating demand caused by the elevated trade tensions and slowing global economic growth.
In other words, the ongoing trade war is trumping the threat of a shooting war — for now, at least.
2. Pressure on Trump: American retailers, manufacturers and tech companies have warned President Donald Trump that tariffs on China will damage the US economy and lead to job losses.
More than 600 companies and trade associations — including Walmart, Costco, Target, Gap, Levi Strauss and Foot Locker — have written to Trump urging him to remove the import taxes on Chinese-made goods.
“We know firsthand that the additional tariffs will have a significant, negative, and long-term impact on American businesses, farmers, families, and the US economy,” the companies said in the letter.
“An escalated trade war is not in the country’s best interest, and both sides will lose,” they added.
3. Facebook goes crypto: Facebook has secured backing from more than a dozen big companies as it prepares to launch a new cryptocurrency, according to the Wall Street Journal.
The newspaper reports that Facebook has enlisted companies including Visa, Mastercard, PayPal and Uber in the effort.
The companies will invest around $10 million each in a consortium that will govern the digital coin, called Libra, according to the Journal.
4. Global market overview: US stock futures were pointing lower.
European markets opened with mild losses, while stocks in Asia ended in negative territory. The Hang Seng index shed 0.8% as Hong Kong braced for another weekend of protests.
The Dow Jones industrial average and the S&P 500 closed up 0.4% on Thursday. The Nasdaq added 0.6%.
US investors will have one significant economic report to ponder on Friday. The US Census Bureau will release its report on retail sales for May at 8:30 a.m. ET.
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5. Coming this week:
Friday — US and Chinese retail sales; University of Michigan consumer sentiment
