Asian trade: Asian stocks are heading lower for the third consecutive day on poor economic outlook. However, the U.S. futures rose higher tonight. Up to now, the S&P futures gained 3.80 points, or 0.40%.
In Japan, Topix, the index tracking the performance of all the domestic companies listed in the First Section, is heading towards a 25-year low tonight, as the Japanese economy is deteriorating at a very fast pace. In the same time, the S&P fell -37.67, or 4.56%, even though, Mr. Obama was signing the stimulus bill.
It appears that investors are not “buying” the stimulus program, after the last two bills did not have the expected effect for the economy. According the CBO’s reports, the stimulus will be deployed in the economy over next 19 months. However, the bill would still not be able to reduce the huge output gap expected over the next few years, and it is suggested that it will have limited effects. According to CBO, the output gap will reach 7.4% in 2009, and will slowly move towards the 0% benchmark by 2014. Even before it was voted upon, economists said the stimulus plan was set to fail, because of the big number of tax cuts, something that does not help the economy over the longer-term.
Tonight, the Nikkei fell 90.86 points (1.19%) to 7,554.65. The Australian S&P lost 69.00 points (1.99%) to 3,395.30.
Crude oil broke under the $35 benchmark area. Crude oil for March delivery fell $0.20 to $34.90.
Gold continues to head higher, as investors use it as a safe haven. Bullion for immediate delivery rose $1.90 to $969.40.