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Current Futures: Dow +6.00, S&P +0.90, NASDAQ +0.50
Asian markets decline for the first time in the last four days of trading, following the close of the U.S. spot session. The global equity markets saw a day of profit taking, after two different reports failed to reach market’s expectations and stocks reached the highest level in months.
Japanese markets are posting small declines as some investors consider the current valuation as being too high related to the shares’ earning forecasts. The major indexes from the world posted double-digit gains in the last three months of trading, even though the earning forecasts for many companies are sitting at record low values, something that does not justify the current prices.
In the U.S., the S&P declined as much as 2.2% during the intra-day session, but surged higher in the last 30 minutes to close 1.4% lower. TheLFB-Forex.com Trade Team said that the S&P had a 15.5 P/E ratio yesterday, while the same ratio jumped over 20 for the Japanese Nikkei on Wednesday, making the stock market appear very expensive for the current period.
The ADP report showed yesterday that the economy lost 523K jobs in May, reconfirming the tough conditions from the labor market. On Friday, the unemployment rate is expected to reach 9.2%, the highest rate in the last 25-years. Additionally, the ISM Non-Manufacturing PMI report printed a weaker than expected read, which also created some cast of doubt at the S&P’s value.
Overnight, the Japanese Nikkei lost 14.02 points (0.14%) to 9,727.65. The Australian S&P/Asx slipped 70.40 points (1.75%) to 3,946.80.
Crude oil for July delivery was recently trading at $66.10 per barrel, lower by $3.30.
Gold for July delivery was recently trading higher by $3.20 to $968.80.
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