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Current Futures: Dow -77.00, S&P -8.80, NASDAQ -15.00
European markets declined in-line with the S&P futures on Monday morning, as some investors considered the market’s current valuation as high. Moreover, the S&P 500’s inability to break above the 945.00 support area raises some questions about investors’ sentiment.
Asian markets advanced, but the gains were relatively modest as commodity stocks declined together with the raw material market. Commodity stocks saw very strong upside movement during the last few weeks of trading; oil has risen more than 50% since early March. However, Asian companies that export their products to the U.S. retail markets led the gains overnight, as some participants consider that the worst is behind the economic business cycle. Consumers drive Two thirds of the U.S. economy; any change in the country’s business cycle is reflected directly in company earnings, and therefore stock values, TheLFB-Forex.com Trade Team noted.
In European market trade the vast majority of stocks declined during the first part of the day. Only two stocks out of the 30 members in the German Dax, and 3 out of the 102 companies listed in the U.K. FTSE advanced this morning, while all others traded in the red. In German trade, the car-manufacturers were the most effected by the Monday’s selling. However, even though Daimler and BMW lost around 2%, Volkswagen surged 2.50% higher, as it seems the company’s free-float share availability is close to zero. As a note, during the hight of the credit crisis VW became briefly the world’s biggest company, because of the same free-float problem, TheLFB-Forex.com Trade Team said.
Commodity stocks had a very strong influence in the U.K. FTSE since much of the index’s capitalization comes from this sector. As in the Asian session, commodity stocks continued to decline this morning, being the worst performers of the day. Moreover, the U.K. financial sector moved lower together with the raw material companies. Lloyds dropped 3%, after the bank’s public offer draw less bids than expected, while Barclays lost 2.50% as a newspaper announced a possible deal with BlackRock.
Overnight, the Japanese Nikkei added 97.62 points (1.00%) to 9,865.63. The Australian S&P/Asx advanced 36.60 points (0.93%) to 3,971.20. The U.K. Ftse declined 40.80 points (0.92%) to 4,397.78, while the German Dax lost 54.67 points (1.08%) to 5,022.36.
Crude oil for July delivery was recently trading at $67.05 per barrel, lower by $1.40.
Gold for July delivery was recently trading lower by $10.70 to $951.90.
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