Disappointing Japan Trade Data Weighs Down US Stock Futures

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Traders work on the floor of the New York Stock Exchange
Traders work on the floor of the New York Stock Exchange December 15, 2011.

The U.S. stock index futures pointed to a lower open Wednesday as investor confidence was weighed down by the report that Japan returned to trade deficit in July indicating a soft global demand and weakening economic growth momentum.

The futures on the Dow Jones Industrial Average were down 0.20 percent, those on the Standard & Poor’s 500 index were down 0.33 percent, while the Nasdaq 100 index futures were down 0.27 percent.

The data released by Japan’s Finance Ministry showed that the country recorded a 517.4 billion yen ($6.5 billion) trade deficit in July, down from the 60.3 billion yen surplus in June. Investors feel that the Bank of Japan will have to come up with bold measures to improve the country's economic condition.

The National Association of Realtors' home sales report that measures the change in the annualized number of existing residential buildings sold during the previous month will be made public Wednesday. It is expected to rise to 4.52 million units in July, up from 4.37 million units in June.

Investors are likely to focus on the minutes of the last Federal Open Market Committee (FOMC) meeting to be announced by the Fed Wednesday. With the FOMC closely monitoring the  incoming information on economic and financial developments, market players will be on the alert watching the minutes closely for any indications of the announcement of stimulus measures.

The U.S. markets fell Tuesday as investors revived worries about the lack of stimulus measures from policymakers to rejuvenate the world economy. The Dow Jones Industrial Average dropped 0.51percent, the S&P 500 Index was down 0.35 percent and the Nasdaq Composite Index fell 0.29 percent.

Major European indices were in red as investors were disappointed to note that Japanese exports to the European Union slumped in July hinting at the slack economic condition in the euro zone. London’s FTSE 100 was down 49.34 points, Germany's DAX 30 Index fell 54.99 points and France's CAC 40 declined 31.63 points.

Most Asian stocks fell as market sentiment turned negative with the report that Japan’s exports declined in July to bring the country back to trade deficit.

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