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Current Futures: Dow +27.00, S&P +3.30, NASDAQ +2.25
Asian markets trade in the red for the fourth consecutive day, even though earlier, the major U.S. indexes appeared able to close above the break-even line.
Less than 30 out of the 225 member companies of the Japanese Nikkei were posting gains on Thursday, as investors’ gauge the equity markets as expensive related to their forecasted earnings. Over the last three months of trading, the major global indexes experienced a very steep uptrend, which made some shares advance as much as 40%. However, the business environment remained tough over the same period (as the global economy is still in a contraction phase), something that held expected earnings at a very weak level, TheLFB-Forex.com Trade Team noted.
Most sectors declined in the Asian session, as the S&P’s decision to downgrade 18 U.S. banks still weighs on investors’ minds. The rating agency said that the current environment is less favorable for the financial sector, which makes a number of banks less likely to be able to meet their obligations. From the 18 banks downgraded, five were cut to junk, which means their debt is trading near a default level. Additional negative news came from FedEx, which reduced its earnings forecast and said that the company expects harsh conditions over the next few quarters.
Overnight, the Japanese Nikkei lost 140.09 points (1.42%) to 9,700.76. The Australian S&P/Asx declined 0.20 points (0.01%) to 3,903.90
Crude oil for July delivery was recently trading at $71.50 per barrel, higher by $0.50.
Gold for July delivery was recently trading up by $5.10 to $941.30.
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