Current Futures: Dow +5.00, S&P +1.00, NASDAQ +0.75
Asian markets dropped tonight, after a report showed that retail sales slowed in April. U.S. futures are trading now side-ways, even though the major U.S. indexes declined at a sustained pace during the spot session.
A release showed Wednesday that retail sales declined in April, whereas investors were expecting a flat read. To make the matter worse, the March numbers were also revised lower, pointing out that the economy is not recovering at the pace previously thought. In nine occasions over the last ten, retail sales dropped in the U.S. economy. As such, Asian markets declined even from the first minutes of trading, since a large number of companies are exposed to U.S. consumers. Among them, the giant electronic maker Sony, and Toyota, who recently downgraded their 2009 earnings forecasts.
Additional to the retail sales numbers, a different report showed that foreclosures were 30% higher in April than one year ago. At the same time, April was the second month when the number of U.S. households’ foreclosures rose more than 340.000. “The economy cannot recover without having the housing market hit a bottom first,” TheLFB-Forex.com Trade Team said. “The two releases, taken as a whole, infirm some of the recent views that the economic recovery will take the V-shape. It is hard to see how someone expects the economy to recover at a fast pace, when consumers are spending less or when the housing market is still declining,” TheLFB-Forex.com Trade Team commented.
Overnight, the Japanese Nikkei fell 228.08 points (2.44%) to 9,112.41. The Australian S&P/Asx slipped 105.40 points (2.73%) to 3,750.70.
Crude oil for June delivery was recently trading at $57.80 per barrel, lower by $0.20.
Gold for June delivery was recently trading lower by $0.90 to $925.00.