Current Futures: Dow -18.00, S&P -2.60, NASDAQ -2.75

Asian markets are trading mixed, following the U.S. equity market, which closed slightly under the breakeven line. 

The U.S. market closed in the red on Tuesday as the price paid for crude oil declined, sending the commodity stocks lower, while the financials dropped on low volume ahead of the stress test results. Investors came under pressure ahead of the stress test results, which are anticipated to show that 10 out of the 19 banks tested will require additional capital. The pressure was even greater on the financials, since the Treasury is expected to announce tomorrow the conditions to repay the TARP funds. 

It is expected that the Treasury will ask banks to prove they can raise money without the government’s help, something that has not happen lately. Trade Team noted that the S&P decline of 0.38% is very small comparable with the possible implications of the stress test results, something that suggest that investors are confident ahead of the report.

Despite this, the financial sector continued to advance in the Asian session. This time Australia’s biggest lender, Westpac, which announced that the first quarter profit fell inline with analysts’ expectations, drove the sector higher. Trade Team notes that the Australian financial sector is in a very good shape, since the economy has not experienced strong declines in the housing market or any boom-and-bust cycles over the last two decades. This was also noted in Mr. Glenn’s speech on Tuesday morning, when the RBA decided to leave rates on hold at 3%. Before the credit crises started, Australia had the biggest key interest rate among the developed countries.

Overnight, the Japanese Nikkei is closed for a third consecutive day. The Australian S&P/Asx gained 6.30 points (0.16%) to 3,896.70.
Crude oil for May delivery was recently trading at $54.05 per barrel, up by $0.20.

Gold for May delivery was recently trading lower by $6.00 to $898.30.