Stock Futures Lower as North Korea Threatens US in Guam

Mitch McConnell Cory Gardner

Stock Futures Lower as North Korea Threatens US in Guam

On Tuesday, President Donald Trump warned North Korea of "fire and fury" in response to recent threats from Pyongyang, which said it was examining plans for attacking Guam, a USA territory in the Pacific with a military base.

He said the North should be "very, very nervous" and that China can do a lot more to deal with the crisis.

Overnight in Asia, the South Korea Kospi fell 1.1 percent to about 3.5 percent from a record high hit July 25.

"Of course, it's all come at a time when share markets are due for a correction, so North Korea has provided a ideal trigger". North Korea experienced several failures before a successful flight test in June previous year, after which the country's leader, Kim Jong Un, declared that his nation had the "sure capability to attack in an overall and practical way the Americans in the Pacific operation theater".

"It was no accident that North Korea threatened to launch four missiles, it deliberately complicates the decisions of US policy makers", he said.

The strip of land in the western Pacific Ocean is roughly the size of Chicago, and just 4 miles (6 km) wide at its narrowest point.

Like other United States territories, Guam has a sometimes complicated relationship with the mainland but many across the island say despite the threats and concerns, they feel reassured and protected by the military - especially in times of tense, geopolitical sparring.

Investors also drew some encouragement from new government data showing USA inflation at the consumer level inched higher last month.

China has repeatedly said it is committed to enforcing increasingly tough United Nations resolutions on North Korea, though it has also said what it terms "normal" trade should not be affected, and neither should ordinary North Koreans be affected. In 1950, an act of Congress made it an unincorporated organized territory of the United States. The U.S. took control of Guam in 1898, when Spanish authorities surrendered to the U.S. Navy. Residents do not pay US income taxes or vote in the general election for USA president.

Away from the geopolitical drama, USA inflation data is due at 1330 GMT. There is a USA air base there, a Navy installation and a Coast Guard group.

While some people are dismissing the seriousness of the conflict, officials in Guam are not taking the threat lightly. Guam also has a Terminal High Altitude Area Defense (THAAD) anti-missile system, similar to the recently installed in South Korea.

"If they had confidence from their readings that they would not hit US territory, it's possible they'd just let them fall into the sea, but I think they'd also take a very serious look at shooting them down", he said.

Hartz, a Tennessee native who moved to the island 15 years ago, said he has confidence his fellow Guamanians would help one another if the worst were to occur. Now, about 160,000 people live on Guam. Its chief languages are English and Chamorro. As of 2014, according to Andersen Air Force Base, Guam held "the largest munitions stockpile in the world" - stored in igloos "deep [in] the jungle, surrounded by brown tree snakes and wild boar". They are both managed under Joint Base Marianas. "That calls for reinvesting into our aging infrastructure, updating our level of hospitality and inviting new airlines to open up more flights to Guam".

Guam is also the home port for nuclear submarines and a contingent of Special Operations Forces. About 30 percent of it is controlled by USA armed forces, including the Anderson Air Force Base, which hosts B52 bombers and fighter jets.

Despite its size, it plays an outsized role in US military strategy in the Pacific.

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