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Global Market Wrap:
European Markets Prepare To Close The Week Into Red
Equity Futures: Dow +4.00. S&P +0.90. NASDAQ +0.50. Japanese Nikkei -30.00. German Dax -32.60.
European markets continue to struggle below the break-even line, even though there were some small attempts to stay into the green. At the same time, the S&P futures posted some small gains, but the trading volumes were subdued. Earlier in the day, Asian markets closed lower than the last trading session of the week.
European Trade: Most European markets opened below the break-even line, but there were some exceptions as well, as the U.K. FTSE and Norway’s OBX stock index, which are up approximately 0.3%. On the other hand, the declines are led by Spain’s IBEX 35, which has lost as much as 1% even from the first few trading hours.
With the declines seen over the last three days of trading, the European markets are preparing to close the weekly charts into the red for the first time over the last few weeks of trading. The U.K. FTSE is heading higher for almost two months now, time in which it had barely retraced. The current sell-off may allow the market to correct some of the recent rallies, since the major indexes are starting to look overextended.
Sector Moves: The commodity sector was among the only one that helped the market gain some points, together with the food and beverage sector. This was the best seen in the U.K. FTSE, were commodity companies have by far the biggest weight. However, offsetting these gains was the financial sector, which was the worst performing in all of Europe. The trading volume had been somehow lighter than the average during the European session, but this was probably a consequence of the light economic schedule and because it is the last trading day of the week.
S&P Futures: The S&P futures had a very thin trading session in Friday morning trade, moving less than 7 points. This might reflect a market that is preparing for Friday’s close and for the 08:30 EDT reports. Over the last period of trading, the S&P futures started moving only after the 08:30 EDT reports were out of the way.
Economic Moves: There were no top tier reports during the overnight session, but a news release showed that M3 money supply dropped to 2.5% in August from one year ago in the Euro-area, one of the slowest growth paces on record. During the U.S. session, the market is preparing for the 08:30 EDT durable goods orders and for the new home sales report, scheduled at 10:00 EDT.
Crude oil for October delivery was recently trading at $66.20 per barrel, up $0.30. Crude oil saw a very thin volume overnight, reflecting the ranged bound trading from the forex market. However, this is likely to change as the market is heading towards the U.S. session.
Gold for October delivery was recently trading lower by $0.70 to $998.20. Gold spent the entire overnight session struggling to break above the $998.00 area, but so far, the pair has failed to pull the move. Following the selling seen in Thursday late trade, gold is now trading below the 20-day moving average.