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China Shift Sends Global Markets, U.S. Futures Lower; This Airline Jumps | Stock News & Stock Market Analysis

Stock futures took a deep early dive early Wednesday, as commodities prices rose and as global markets reacted to a possible change in central banking strategy in China.

Nasdaq 100 futures spearheaded the dive, down nearly 0.7%, with Apple (AAPL) down 0.8% and all four FANG stock listings trading sharply lower.

Futures for the Dow Jones industrial average slumped 0.4% below fair value, as Intel (INTC) and Microsoft (MSFT) staked out the early low end. S&P 500 futures dipped 0.3%, with United Continental Holdings (UAL) helping to bolster its early trade.

Bond and currency markets were buzzing, after a review of foreign exchange holdings left officials in China recommending the country slow or stop its purchase of U.S. debt. U.S. 10-year treasury yields rose to 10-month highs, the dollar tumbled and the yen soared, driving busy action across global markets.

China markets notched modest gains, while stocks in Tokyo slipped after a three-session run up. China and Japan are the two largest holders of U.S. debt. Markets in Europe appeared set to snap a four-day rally, taking a steep dive in early trade, but paring losses near midday. Frankfurt’s DAX fell 0.9% and the CAC-40 in Paris slumped 0.4%, while London’s FTSE 100 reversed early losses into into a narrow gain.

Apple Slips, United Gets Traffic Boost, Lennar Earnings Miss

United Continental Rose more than 2%, after reporting late Tuesday its December traffic rose 2.7%. A six-week advacnce lifted shares 21% and back above their 10-week moving average, as the stock climbs the right side of a seven-month consolidation.

Homebuilder Lennar (LEN) slipped 1.8% following mixed fourth-quarter results. The stock is extended after an October breakout and a November rebound from support at its 10-week line.

Apple took a 0.8% dip. The company announced it would release its cloud-stored data from China-based devices over to a state-owned local partner, according to the country’s regulations, news reports said. Apple shares have continued to hug support at their 10-week moving average, below a 176.34 flat base buy point.

Among IBD 50 stocks, smart-home play Control4 (CTRL) jumped 2.6% in premarket action. Shares of the Salt Lake City, Utah outfit have been consolidating below their 10-week line since early December.

Oil, Copper Jump; Federal Reserve Gets Busy

Commodities prices, reacting partly to the action in currencies, are likely to figure into Wednesday’s market’s action. Oil futures rose almost 1%, hoisting West Texas Intermediate above $53 per barrel and sending Brent crude to just below $70. The American Petroleum Institute weekly inventories release showed a much larger than expected draw down of 11.2 million barrels –  a sixth straight decrease and reportedly the largest withdrawal in almost two decades. The Energy Information Administration delivers its weekly stockpiles report at 10:30 a.m. ET.

Copper climbed almost 2%, with silver, gold and natural gas all trading up in the 1% range.

The Labor Department’s import/export price data for December are due out at  8:30 a.m.ET.

Federal Reserve officials may also weigh in oin the day’s action, with little more than three weeks before the term  of current Chair Janet Yellen ends and appointee Jerome Powell is sworn in as her replacement.

Chicago Fed President Charles Evans and Robert Kaplan of the Dallas Federal Reserve both speak around 9 a.m. ET. Kaplan is set speak again at 10:15 a.m., and James Bullard, president of the St Louis Federal Reserve, speaks at 1:30 p.m. ET.

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