Stock futures pressured by global growth concerns

[October 09, 2018]   By Shreyashi Sanyal

(Reuters) - U.S. stock index futures fell on Tuesday, following European and Asian weakness, after the International Monetary Fund cut its global growth forecasts, squarely blaming the Sino-U.S. trade war.

The IMF lowered its global economic growth forecasts for 2018 and 2019, and its 2019 estimates for the United States and China, saying the two countries would feel most of the impact of their trade war next year.

Besides the fear of slowing global growth, Wall Street has come under recent pressure after Treasury yields hit multi-year highs as strong data fueled fears about rising inflation and potentially faster interest rate hikes.

The benchmark U.S. 10-year Treasury yield <US10YT=RR> climbed to its highest since May 2011 on Tuesday.

Despite the recent pullback, U.S. stocks are near record highs and that has raised concerns over valuations, especially of high-growth stocks, such as technology and the FAANG group.

Shares of the so-called FAANGs — Facebook <FB.O>, Amazon <AMZN.O>, Apple <AAPL.O>, Netflix <NFLX.O> and Alphabet <GOOGL.O> — were down between 0.39 percent and 0.67 percent in trading before the bell.

At 7:34 a.m. ET, Dow e-minis <1YMc1> were down 155 points, or 0.58 percent. S&P 500 e-minis <ESc1> were down 17.25 points, or 0.6 percent and Nasdaq 100 e-minis <NQc1> were down 46.75 points, or 0.63 percent.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 3, 2018. REUTERS/Brendan McDermid

Perrigo <PRGO.N> fell 2.6 percent after the drugmaker replaced Chief Executive Officer Uwe Roehrhoff, who took the helm less than a year ago, with the former head of Lorillard Tobacco, Murray Kessler.

Kroger <KR.N> fell 2.2 percent after Deutsche Bank said the grocer would face higher costs in its e-commerce expansion and space optimization strategy.

Papa John's <PZZA.O> rose 8.9 percent after the Wall Street Journal reported Nelson Peltz' Trian Fund Management was evaluating a takeover bid for the pizza chain.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)

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