Current Futures: Dow -46.00, S&P -5.60, NASDAQ -7.25
European Trade: European markets opened lower again, as some important companies posted disappointing results. U.S. futures also moved lower overnight ahead of the retail sales report
Fertilizer producer K+S declined the most on the German Dax, -10.15%, after it reduced its 2009 earnings forecasts significantly. On the other hand, Infineon, a company specializing in chip-production, rose almost 10% tonight and led the gains on the German benchmark index. On the U.K. Ftse, the insurer Aviva and tourism agency Thomas Cook led the declines, as both posted weaker guidance for the upcoming year.
The biggest European retailer, Carrefour, announced that its 2008 profits shrank by 45%, more than analysts had estimated. The retailer had to initiate some big price cuts in order to remain competitive, while at the same time, the number of customers plunged in the last few months of the year. Almost every large European retailer has reported the same trend.
Looking ahead to the U.S. session, an economic report is expected to show U.S. retail sales shrank again in February. The release is likely to show a 0.5% contraction in February, following a 1% growth rate in January. Consumers are cutting back on their spending as the unemployment rate has continued to rise in the last few months, and consumer credit is almost non-existing. Consumer spending, which makes up about 70% of the U.S. economy, will continue to weigh on the economy, as it is one of the main engines. It is hard to believe the economy can find a bottom without consumers spending at a sustained rate.
Tonight, the Nikkei fell 177.87 points (2.41%) to 7,198.25. The Australian S&P slipped 8.90 points (0.27%) to 3,235.50. The U.K. Ftse fell 33.81 points (0.92%) to 3,660.00, while the German Dax shed 57.05 points (1.46%) to 3,857.05
Crude oil traded flat in the overnight session. Crude oil for April delivery fell $0.10 to $42.90
Gold strengthened as the overnight markets declined. Bullion for immediate delivery gained $1.00 to $910.40.