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Current Futures: Dow +7.00, S&P +1.30, NASDAQ -0.50
European markets are trading near the break-even line, but favoring the red side, following the strong selling seen on Thursday. The S&P futures market had a 4 point range overnight and moved on a weak momentum ahead of the U.S. July 4th Holiday weekend that has the market closed on Friday.
During the Asian session, the Wall Street futures were able to hold above the break-even line, but shortly after the London open, the market retraced some parts of those gains. Moreover, the German Dax and the U.K. FTSE opened the cash session a few points into the green, but then fell below it relatively quickly.
The two major European indexes, the Dax and the FTSE are starting to look a little bearish, TheLFB-Forex.com Trade Team notes. The Dax just broke below a bearish flag formation, and now the German index is trading very close to the 4670 area, which holds the pair since late April.
The U.K. FTSE is trading just above the 4210 area, which acted as a support area for almost two weeks now. If the FTSE does break any lower, it would reach the lowest value since late April. As a note, both indexes are trading below the 23.6% retracement of the trend started in March, which also can be interpreted as a negative factor.
Fundamentally speaking, the latest macroeconomic data also confirms a bearish outlook, with data coming from the labor market looking extremely weak, while the number of failed banks keep rising, reaching so 52 far – the most since 1992. Maybe the market should have ‘sold in May, gone away, and not come back ‘till St Swithern’s Day’, as per the City of London saying.
In Europe, the financial sector advanced the most of any sector on Friday, something that has not happened over the last few weeks. The biggest gainers were the German banks as policy makers are likely to vote for a German bad-bank bailout plan. Commodity stocks were the worst performers in Europe, as raw materials plunged at a sustained pace lately.
Overnight, the U.K. FTSE fell 0.70 points (0.02%) to 4,233.56, while the German Dax declined 4.39 points (0.09%) to 4,714.10
Crude oil for July delivery was recently trading at $66.20 per barrel, lower by $0.80. On Thursday, crude oil tumbled $3.3, one of the biggest one-day declines of the last few months.
Gold for July delivery was recently trading higher by $1.00 to $932.00. Currently gold trades in a very volatile area, delimited by the 100-day moving average on the downside, while on the upside by the 20 and the 50-day moving averages.
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