Current Futures: Dow -3.00, S&P +0.50, NASDAQ +4.75
European Trade: Following the huge gains seen in the last day of trading, European markets opened lower this morning. Asian shares advanced overnight, while U.S. futures traded flat.
E.on led the declines for a second consecutive day on the Dax, as the company cut its growth forecast for 2009. The financials are still profiting from the strong momentum seen yesterday, and are among the Dax’s top gainers. Deutsche Boerse, the owner of the Dax index rose almost 3.5% today, as some speculate the company is looking to form a partnership in order to get through the credit crunch with more ease. In the U.K.’s Ftse, HSBC declined 8%, even though its shares soared during the Asian trading hours. At the same time, Barclays rallied for a second day, as it seems the bank will avoid any government intervention. Barclays rose 7% today, after a similar gain yesterday.
The U.S. Congress approved a $410 billion spending bill yesterday, by a 62 to 35 vote. The bill was created to increase spending, help the federal agencies that are said to be under-funded for a longer period, and loosen the trade embargo with Cuba. This program was scheduled to be voted on last fall, but due to other huge expenses run by the previous administration, it was delayed until now. The main problem with this bill is its huge size, compared with its medium and short-term effects. The U.S. economy is already set to run a huge deficit in 2009, something that will force the government to borrow more money.
Two different reports tonight showed that investments in China jumped 26.5% in February, while exports, its main source of income, plunged by a record amount during the same period. Investments rose as the government is deploying the $585 billion stimulus plan, and develops the Chinese infrastructure. On the other hand, exports plunged 25.7% in February, reflecting the slump in the global trade. The question for the moment is, “can the Chinese economy finds the strength to overcome its export market”. Chinese officials expect the economy to grow 8% in 2009.
Tonight, the Nikkei gained 321.14 points (4.55%) to 7,376.12. The Australian S&P rose 59.90 points (1.88%) to 3,244.40. The U.K. Ftse fell 21.83 points (0.59%) to 3,693.40, while the German Dax shed 25.54 points (0.66%) to 3,693.40
Crude oil traded flat in the overnight session. Crude oil for April delivery fell $0.10 to $45.80
Gold strengthened as the European markets declined. Bullion for immediate delivery gained $6.60 to $902.50.