Chinese regulators expanded their crackdown on China’s biggest internet companies. The government imposed tough new rules targeted at their financial services arms.
JD.com, Meituan, Xiaomi, and Didi Chuxing were ordered to set up financial holding companies. These will be subjected to clear capital requirements, reducing their profitability.
The move was broadly similar to the action taken recently against Alibaba affiliate Ant Group. It also came after a $1.6 billion fine levied this week on Tencent for past antitrust violations.
Chinese stock indices all declined, although relatively modestly. A drop in China’s official manufacturing PMI also weighed on sentiment.
U.S. Stocks Set for Some Profit-taking
This week’s results from Big Tech have shown emphatically how the dominance of the biggest platform companies has intensified. These include Apple, Amazon, Facebook, Google, and Microsoft.
Regulatory reactions continue to bubble with the EU ruling on Friday. The ruling said that Apple’s policy on streaming is an abuse of its dominant position.
U.S. stock markets, retreating from record highs, are set to open lower later. This was due to a profit-taking at the end of another strong month.
The earnings season has largely lived up to very high expectations. Pockets of weakness like Twitter and Pinterest, with the awareness of high valuations are making it harder to advance any further in the near term, at least.
Dow Jones futures fell 96 points, or 0.3% as of 6:30 AM ET (1030 GMT). The S&P 500 futures dropped 0.4%, and Nasdaq 100 futures lost 0.5%. That is notwithstanding the uplift from Amazon.
The data calendar later is led by personal income and spending data for March. That comes along with the price index for personal consumer expenditures, the Federal Reserve’s preferred measure of inflation.
The University of Michigan’s consumer sentiment index is due at 10 AM ET. This also includes a measure of inflation expectations.
Meanwhile, in energy commodities, oil prices retreated a little from seven-week highs. U.S. crude prices were down 1.4% at $64.07 a barrel by 6:30 AM ET. Brent crude was 1.2% lower at $67.23 a barrel.
Still in the commodities space, copper failed to hold above the $10,000 a ton mark. This was due to many speculative players apparently deciding that it was the level at which to book profits.
Palladium futures, however, were unstoppable. The futures topped $3,000 an ounce for the first time.