US stocks set to follow Asia markets lower after report that US-China trade talks are 'like pulling teeth'

Evan Vucci/AP

Steve Mnuchin (left) is in China for trade talks this week.

• US futures are pointing down after pessimism about the the trade war hit Asian shares Friday and weak retail sales figures in the US. 
• Weak inflation data out of China initially hurt European markets before shares rebounded.
• The South China Morning Post reported that both sides on the negotiations "remain far apart on key issues" on trade.

US stocks are set to decline on Friday, following Asian markets lower on reignited pessimism about US-China trade talks, where there's reports of tensions as leaders from both nations meet in Beijing this week.

Then there's jitters about the US economy after retail sales dropped the most in a decade, and the China economy after China's producer price index rose at the weakest pace since 2016. And a new dispute looms over US President Donald Trump's decision to declare a national emergency to get federal money for a border wall.

High-level officials from the US and China officially kicked off two days of meetings on Thursday. The South China Morning Post, citing sources, reported that trade negotiators "remain far apart on key issues," including equal market access and intellectual property protection.

"One person described Beijing as making only 'cosmetic, non-impactful offers' on issues such as industrial subsidies, saying it was 'like pulling teeth,'" the newspaper reported early Friday. 

Time is of the essence since March 1 marks the scheduled end of the 90-day pause in the trade war.

"Reports that there is still a good distance between the two sides as high level talks begin in Beijing is not doing much to support an already downbeat sentiment," said Jasper Lawler, Head of Research at London Capital Group. 

The report comes despite public declarations that talks were "productive."

Here's the roundup: 

• Futures on the S&P 500, Dow and Nasdaq were all down about 0.3% in early trading as of 9:50 a.m. in London (4:50 in New York) 
• The Shanghai Composite Index, the Hang Seng and the Nikkei all tumbled more than 1.1%
• The Euro Stoxx 50 is up 0.4% 
• The CAC 40 is up 0.7%.
• Brent Crude is up 0.4%.