Current Futures: Dow -28.00, S&P -3.00, NASDAQ -3.25
Equity markets around the globe are heading lower, following the poor economic reports that hit the financial world in the last few days of trading. The Asian and the European markets declined, while the S&P futures traded side-ways in a 6-point channel.
A number of reports suggested that the global recovery might not come soon, or as strong as the equity markets expected. First, two different reports from China and Japan suggest that global trade is still in a decline, even though the pace has slowed. Both countries still reported declines in month over month exports, which suggest that demand is still lagging.
However, the market’s decline started after the U.S. retail sales, which showed that consumers spent less in April, similar to what was seen in the previous months. TheLFB-Forex.com Trade Team notes that economic recovery is not possible in the U.S. without consumers’ spending, since consumers make up 2/3 of the economy. Moreover, a release on Wednesday showed that foreclosures kept climbing in April, reaching a new record high for a second month in a row. “The latest reports show that things are not really as rosy as investors would have hoped for. It is no surprise that the IMF continues to say that the recovery phase will be long and slow,” TheLFB-Forex.com Trade Team said. However, a clear picture of how consumers behave over the last quarter may come later today, with the Wall Mart earnings report.
Overnight, the Japanese Nikkei fell 246.76 points (2.64%) to 9,093.70. The Australian S&P/Asx slipped 132.40 points (3.44%) to 3,723.40. The U.K. Ftse declined 22.50 points (0.52%) to 4,308.87, while the German Dax shed 47.46 points (1.00%) to 4,680.15
Crude oil for June delivery was recently trading at $57.50 per barrel, lower by $0.50.
Gold for June delivery was recently trading lower by $2.30 to $923.60.