It looks like the equity markets are back in risk-aversion mode as most markets opened for trading on Monday closed in the red. Asian markets continued the downturn tonight, trading slightly under the breakeven line. U.S. futures also declined with the S&P falling 0.20 points.
The major Asian indexes declined tonight for the first time in the last five days. The decline was due to the drop in the raw materials market, which affects the valuation of the commodity-stocks. Additional downside momentum might be coming from the financials where some traders are questioning the recent comments made by a number of bank CEOs that they have been in profit the first few months of the year. TheLFB-Forex.com Trade Team notes that over the past year the financial sector saw the biggest declines in the Asian markets since this sector has been crippled by the huge write-downs fueled the credit crisis.
Soros, one of the legendary Wall Street traders, said recently in an interview that he does not expect the economy to recover any time soon. This contradicts most forecasts, which expect the economy to show growth during the third quarter of2009. Furthermore, saving banks raise the risk of transforming “zombies”, similar to what Japan faced during its lost decade. Mr. Soros also said that the dollar is under pressure now, and may be replaced by the IMF’s Special Drawing Rights in the future.
Overnight, the Nikkei fell 25.95 points (0.29%) to 8,831.98. The Australian S&P/Asx slipped 31.70 points (0.84%) to 3,724.90.
Crude oil traded mixed during the Asian session, gaining only $0.15 to $51.10.
Gold strengthened as risk-aversion returned in the Asian session. Bullion for immediate delivery rose $2.80 to $875.60.