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Economic Fears May Drive Stocks Lower, As Job Market Expected To Worsen
Written by John Rivera, Analyst
DailyFX.com provides free FX news, trading resources, and market analysis to the forex trading community.
What To Watch For In The US Session
• Economic Worries May Send Stocks Lower
• Jobless Claims
• Same Store Sales On Tap
Economic Fears May Drive Stocks Lower, As Job Market Expected To Worsen
The outlook for the economy is continuing to worsen and may extend the losses from yesterday for equity markets. Initial jobless claims were over 480,000 for a second week as companies stricken by the credit crunch continue to trim their payrolls. Many if the nation’s largest retailers will report same store sales today with Wal-Mart already showing improvement but Costco seeing a decline. If more stores disappoint, it will continue to lower the outlook for domestic growth going forward. However, coordinated rate cuts by the European central banks may raise the outlook for the global economy and be as supportive factor in today’s trading.
Dow Jones 9139.27
The Dow Jones Industrial Average futures are pointing to a lower open as growth forecasts continue to be revised lower. However, we may see multinationals and energy names receive a boost from the global efforts to promote growth.
NASDAQ 1681.64
A weakening labor market will continue to weigh on the outlook for consumer demand and lead to consumer related names trading lower on the day. A number of Nasdaq component are reporting earnings today and we have already seen a number of disappointments including ACI Worldwide and Borland.
S&P 500 952.77
The broader index may trade lower on the declining fundamental picture for the U.S. economy. Futures were pointing to a lower open as risk aversion has started to dominate traders sentiment.
European Session Key Developments
• Stocks Continue To Fall On Growth Concerns
• European Central Banks Cut Rates
• German Factory Orders Fall
European Stocks Continue to Slide Despite Rate Cuts By The BoE, ECB and SNB
European stocks were trading lower throughout the entire trading session as the outlook for growth continues to dim. German factory orders falling 8.0% due to declines in machinery orders only heightened concerns. Simultaneous rate cuts by Europe’s central banks failed to spur bullish momentum, although stocks move from the daily lows most indices were still trading 3% lower. The BoE surprised markets with a 150 bps cut that brought the benchmark rate to 3.00% -the lowest since 1955. The central bank cited concerns over deflation as the reason for the deep reduction. This is a complete 260 for the MPC as it was inflation concerns that kept them from following the Fed and aggressively cutting rates earlier in the year. The SNB also shock markets with their 50 bps reduction of the Libor target as the central bank wasn’t scheduled to make a policy decision. The ECB would follow with their own 50 bps cut as President Trichet would confirm that prices would moderate allowing the central bank to focus on growth.
DAX 4951.88 -214.99 -4.161%
German stocks fell as the growth outlook for the country took another hit with factory orders declining. SIEMENS AG (SIE GY): Europe's largest engineering company drop 2.92 points on the day. Other loses included E.ON AG (EOAN GY): Germany's biggest utility and ALLIANZ SE (ALV GY): Europe's largest insurer which offset a 15 point gain by VOLKSWAGEN AG (VOW GY): Europe's largest carmaker.
FTSE 100 4384.38 -146.35 -3.23%
The FTSE was lower as it saw declines across all sectors with HSBC HOLDINGS PLC (HSBA LN): Europe's biggest bank by market value down 28 points leading the way. VODAFONE GROUP PLC (VOD LN): The world's largest mobile-phone company and BP PLC (BP/ LN): Europe's second-largest oil company were also trading lower.
CAC 40 3492.87 -125.24 -3.461%
The CAC was trading lower led by TOTAL SA (FP FP): Europe's third-largest oil company and BNP PARIBAS (BNP FP): France's largest bank.
IBEX 9295.70 -449.00 -4.608%
Spain’s IBEX was trading lower led by TELEFONICA SA (TEF SM): Europe's second-largest phone company and BANCO SANTANDER SA (SAN SM): The largest bank in Spain.
S&P/MIB 22131.00 -627.00 -2.755%
Italy's S&P/MIB Index was lower led by ENI SPA (ENI IM): Italy's largest oil company and ENEL SPA (ENEL IM): Italy's biggest utility.
DailyFX.com provides free FX news, trading resources, and market analysis to the forex trading community.
Written by John Rivera, Analyst
DailyFX.com provides free FX news, trading resources, and market analysis to the forex trading community.
What To Watch For In The US Session
• Economic Worries May Send Stocks Lower
• Jobless Claims
• Same Store Sales On Tap
Economic Fears May Drive Stocks Lower, As Job Market Expected To Worsen
The outlook for the economy is continuing to worsen and may extend the losses from yesterday for equity markets. Initial jobless claims were over 480,000 for a second week as companies stricken by the credit crunch continue to trim their payrolls. Many if the nation’s largest retailers will report same store sales today with Wal-Mart already showing improvement but Costco seeing a decline. If more stores disappoint, it will continue to lower the outlook for domestic growth going forward. However, coordinated rate cuts by the European central banks may raise the outlook for the global economy and be as supportive factor in today’s trading.
Dow Jones 9139.27
The Dow Jones Industrial Average futures are pointing to a lower open as growth forecasts continue to be revised lower. However, we may see multinationals and energy names receive a boost from the global efforts to promote growth.
NASDAQ 1681.64
A weakening labor market will continue to weigh on the outlook for consumer demand and lead to consumer related names trading lower on the day. A number of Nasdaq component are reporting earnings today and we have already seen a number of disappointments including ACI Worldwide and Borland.
S&P 500 952.77
The broader index may trade lower on the declining fundamental picture for the U.S. economy. Futures were pointing to a lower open as risk aversion has started to dominate traders sentiment.
European Session Key Developments
• Stocks Continue To Fall On Growth Concerns
• European Central Banks Cut Rates
• German Factory Orders Fall
European Stocks Continue to Slide Despite Rate Cuts By The BoE, ECB and SNB
European stocks were trading lower throughout the entire trading session as the outlook for growth continues to dim. German factory orders falling 8.0% due to declines in machinery orders only heightened concerns. Simultaneous rate cuts by Europe’s central banks failed to spur bullish momentum, although stocks move from the daily lows most indices were still trading 3% lower. The BoE surprised markets with a 150 bps cut that brought the benchmark rate to 3.00% -the lowest since 1955. The central bank cited concerns over deflation as the reason for the deep reduction. This is a complete 260 for the MPC as it was inflation concerns that kept them from following the Fed and aggressively cutting rates earlier in the year. The SNB also shock markets with their 50 bps reduction of the Libor target as the central bank wasn’t scheduled to make a policy decision. The ECB would follow with their own 50 bps cut as President Trichet would confirm that prices would moderate allowing the central bank to focus on growth.
DAX 4951.88 -214.99 -4.161%
German stocks fell as the growth outlook for the country took another hit with factory orders declining. SIEMENS AG (SIE GY): Europe's largest engineering company drop 2.92 points on the day. Other loses included E.ON AG (EOAN GY): Germany's biggest utility and ALLIANZ SE (ALV GY): Europe's largest insurer which offset a 15 point gain by VOLKSWAGEN AG (VOW GY): Europe's largest carmaker.
FTSE 100 4384.38 -146.35 -3.23%
The FTSE was lower as it saw declines across all sectors with HSBC HOLDINGS PLC (HSBA LN): Europe's biggest bank by market value down 28 points leading the way. VODAFONE GROUP PLC (VOD LN): The world's largest mobile-phone company and BP PLC (BP/ LN): Europe's second-largest oil company were also trading lower.
CAC 40 3492.87 -125.24 -3.461%
The CAC was trading lower led by TOTAL SA (FP FP): Europe's third-largest oil company and BNP PARIBAS (BNP FP): France's largest bank.
IBEX 9295.70 -449.00 -4.608%
Spain’s IBEX was trading lower led by TELEFONICA SA (TEF SM): Europe's second-largest phone company and BANCO SANTANDER SA (SAN SM): The largest bank in Spain.
S&P/MIB 22131.00 -627.00 -2.755%
Italy's S&P/MIB Index was lower led by ENI SPA (ENI IM): Italy's largest oil company and ENEL SPA (ENEL IM): Italy's biggest utility.
DailyFX.com provides free FX news, trading resources, and market analysis to the forex trading community.