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Current Futures: Dow -20.00, S&P -2.20, NASDAQ -2.50
European markets opened lower, after Asian markets shed most of the gains posted during the early trading session. U.S. futures continue to trade flat, unable to move decisively during the overnight session.
European markets opened lower, after one of the largest investors of Barclays, a Middle East investment fund, announced that it plans to sell part of its stake worth $6.8 billion. This comes after the shares bought by the sovereign fund gained more than 50%. The sovereign fund is known as PCP Gulf Invest 1 Ltd, and it takes most of its funds from the profits derived from the crude oil export activity.
The financial markets in Europe also came under pressure as the price related to the earnings, known as P/E ratio, reached a 5-year high. The recent rallies seen in the equity markets, together with the huge declines in earnings, compared with previous quarters, pushed the ratio to 25.4, much higher than the average seen over the last few years, of 16. The same situation was observed in Asian markets, where the same P/E ratio reached multi-year highs.
On Monday, two famous U.S. companies were kicked out of the Dow Jones index. Travelers and Cisco Systems replaced Citibank and the defunct GM. Ironically, Travelers is Citibank’s former insurance company and is run by a former Citibank CEO who was known for his conservatism. For now, Travelers is the biggest U.S. insurance company.
Overnight, the Japanese Nikkei added 26.56 points (0.27%) to 9,704.31. The Australian S&P/Asx rose 60.90 points (1.56%) to 3,955.30. The U.K. Ftse declined 46.93 points (1.04%) to 4,459.26, while the German Dax slipped 22.97 points (0.45%) to 5,119.59.
Crude oil for July delivery was recently trading at $67.90 per barrel, lower by $0.60.
Gold for July delivery was recently trading lower by $8.80 to $971.20.
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