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Current Futures: Dow -12.00, S&P -0.90, NASDAQ -1.50
Asian markets decline for a second consecutive day, as commodity stocks and companies that have exposure to the U.S. consumer market added pressure on the major indexes from the region.
Commodity stocks continued the global rut, as crude oil appears ready to break below the $70.00 benchmark and as metals lost almost 4% on Monday, the most since April. Together with the commodity stocks, Japanese car and electronic makers retrace some parts of the gains seen lately, as investors question the global recovery theme, TheLFB-Forex.com Trade Team said.
Today’s declines come as the equity markets enjoyed three very strong months, in which the major indexes recovered most of the declines posted in the January-March period. The rally seen in the global equity markets had strong implications in the financial market, since it almost doubled the price of oil, helped metals post double-digit gains, while the Treasury market prepared for strong inflationary pressures over the long term, even though in March most bond traders were expecting deflation.
On Monday, Treasuries rose for the fourth consecutive day, the longest streak in the last five months of trading as traders expect the Fed to expand its asset-buying program. This comes after 10-year Treasury notes reached 4% over the last two weeks something that threatens the recovery of the U.S. economy TheLFB-Forex.com Trade Team notes, since it practically means that the market is asking for additional liquidity cash.
Overnight, the Japanese Nikkei lost 207.37 points (2.07%) to 9,832.30. The Australian S&P/Asx declined 35.00 points (0.87%) to 3,996.70.
Crude oil for July delivery was recently trading at $70.05 per barrel, lower by $0.50.
Gold for July delivery was recently trading higher by $4.40 to $931.90.
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