The Dow Jones Industrial Average index is trading lower this Friday in what has been a muted trading session so far. This is after the Dow Jones futures started the day on a higher note, as upbeat earnings figures from Coca Cola and American Express boosted the asset in pre-market trading. However, the drop in shares of Johnson & Johnson over a major product recall limited the Dow’s pre-market upside response to the positive earnings of Coca Cola and AMEX. Presently, the Dow has given up all its gains and is trading lower.
Dow Jones is trading at 29,648 points as at the time of writing, as disappointing GDP figures from China weigh on investor sentiment. Chinese GDP came in at 6.0%; the lowest figure since the mid-1990s amid immense economic pressure from the US-China trade war. The GDP data from China has reignited fears of a slowdown in the global economy. Earlier in the week, the IMF had predicted a slowdown of the China’s economy, and lowered its global growth forecasts for the rest of 2019 and 2020.
Comments by Fed member Robert Kaplan are also contributing to today’s relatively muted but downbeat session on the Dow Jones index. Kaplan was picked up newswires earlier in the afternoon remarking that the US was not immune to a global economic slowdown. Kaplan, who is the President of the Reserve Bank of Dallas, also went further to state that the possible slowdown was “showing up in manufacturing and investment”.
He however remarked that the Fed was not in a full-fledged rate cutting cycle, stating his preference for restraint in policy adjustment.