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Current Futures: Dow -70.00, S&P -7.80, NASDAQ -10.75
European markets continue to be surrounded by a bearish outlook, and as at mid-day every major European cash market has declined.
European markets opened on weak momentum from the first few minutes of trading, as expected after Asian market declines. Following the drops that were seen near the opening bell, the German Dax and the U.K. FTSE reached their lowest value since late April, retracing
approximately 30% of the trend that was started in March. To some extent, today’s downside move was widely expected, as TheLFB-Forex.com Trade Team noted over the prior days that equity and commodity trends and momentum has dropped lower in-line with reducing global growth forecasts.
However, even though the European markets moved lower on Monday, the S&P futures traded relatively flat throughout the European session. The futures market is down approximately 1% from its Thursday close, and has traded in a tight 3 point range during the second part of the overnight session. The 877.00 area represent the next major support area.
Monday represents the fifth consecutive day in which crude oil posted strong declines. This had a strong effect in the financial market, especially in the U.K. FTSE where raw material commodities have an important weight of the overall index. Together with the commodity stocks, the financial sector was among the worst performing industry of the day, as write-downs are likely to continue over the coming period. In the U.K. FTSE, only one company advanced more than 1% this morning.
Later in the day, the U.S. session might get a lot of attention, with the start of Earnings Season, something that may force some investors pull out of the market, or at least hedge their positions, as we can see in dramatically low volume trade on Monday.
Overnight, the U.K. FTSE fell 50.78 points (1.20%) to 4,185.50, while the German Dax declined 70.45 points (1.50%) to 4,637.76
Crude oil for July delivery was recently trading at $64.40 per barrel, lower by $2.30. Oil declined from the first few hours of trade on Monday, which makes it the fifth consecutive day of declines.
Gold for July delivery was recently trading lower by $7.60 to $923.40. Gold just broke below the 100-day moving average.
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