Current Futures: Dow -10.00, S&P -1.00, NASDAQ -4.75

European equity markets and U.S. futures traded mixed on Wednesday morning, on earnings reports from European financial institutions. In Asia, the major indexes also traded and closed mixed.

During the European session, two important financial institutions reported weaker than expected results. One of the two was ING, the biggest Dutch financial institution, which saw a $1.08 billion loss in the first quarter. In the second half of 2008, the Dutch bank lost over $5.5 billion, on write-downs and further loan provisions. The other European institution was Allianz, the biggest insurer from the region, which saw its first-quarter profits drop 97% in the first quarter to only $40 million. ING declined this morning 6%, while Allianz 2.50%. Trade Team commented that the European financial sector appears to be in a weak position right now, especially when compared with U.S. financial system. However, one should also take into account the influence of the new U.S. accounting rules, which allows banks to value illiquid assets using their own models. As such, U.S. banks can dodge write-downs. 

Yesterday crude oil broke above the $60 dollar benchmark for the first time since November 2008. The main driver behind crude oil’s advance was the overall weakness posted by the dollar over the last few weeks and coupled with mounting signs that the global economy is recovering led investors to see the demand side picking up for energy. 

However, Trade Team notes that, if crude oil continues its gains, even the smallest sign of an economic recovery will be choked. Every small fluctuation in crude’s price is reflected directly in the consumer’s pockets, through gas prices and the price for every day household items, because factories need energy to produce and distribute them. Oil has already rose more than 70% from its lows made earlier this year, something that will probably be reflected in the CPI numbers over the coming months.

Overnight, the Japanese Nikkei added 41.88 points (0.45%) to 9,340.49. The Australian S&P/Asx slipped 21.10 points (0.54%) to 3,856.10. The U.K. Ftse fell 7.30 points (0.16%) to 4,418.24, while the German Dax rose 1.26 (0.03%) to 4,855.37.

Crude oil for June delivery was recently trading at $59.70 per barrel, higher by $1.40.

Gold for June delivery was recently trading higher by $3.30 to $927.20.