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Current Futures: Dow +5.00, S&P +0.40, NASDAQ +0.25
European markets opened the trading session posting small gains, even though the Asian and the U.S. markets posted relative strong declines in the previous session. European futures opened the Tuesday’s trading session down almost 1%, but managed to recover much of the declines and even post some additional gains as the S&P futures started to head higher. This has helped the European spot sessions to open near the break-even line, something that might suggest that investors are shifting towards risk-tolerance, TheLFB-Forex.com Trade Team said.
The reversal lower only came when S&P Futures prices hit the 893.00 area, the closing Wall Street number from Monday, and that was enough to send the Nikkei, Dax, oil, and gold Futures markets lower, and was enough to negate the major pairs bid to break the overnight resistance set by the dollar.
The current downtrend started after the World Bank said over the weekend that they expect the global economy to contract 2.9% this year, while the forecasts made for the emerging economies appear even lower. To further make investors switch to the bearish side of things, most of the financial press reported that insiders are selling at a very strong pace, around 22 times more than they area buying. For investors, this can be a very strong clue that the reported earnings that cover the second quarter will remain very weak, and since insiders (usually top executives) know best how their company has behaved over the last few months, TheLFB-Forex.com Trade Team commented that weaker earnings reports may start to flow in July.
In Europe, the company Anglo American declined 3.5% after its board refused the merger proposal made by the rival company Xstrata. In turn, Xstrate lost 1% on Tuesday morning. Both companies were among the worst performers from the U.K. FTSE index. On the other hand, Thomson Reuters jumped 6% in London, after the company announced it would end its listing in the U.K. FTSE and in the NASDAQ market.
Overnight, the U.K. FTSE gained 14.22 points (0.34%) to 4,248.27, while the German Dax added 19.04 points (0.41%) to 4,712.64
Crude oil for July delivery was recently trading at $66.95 per barrel, lower by $0.50.
Gold for July delivery was recently trading lower by $2.70 to $918.30.
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