European Markets Looking For Direction

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Current Futures: Dow +3.00, S&P +0.80, NASDAQ +1.50

The market searched for a solid direction during the overnight session, but up to now, the major European have indexes failed to develop a trend, even though some small attempts to break higher have been seen. 

S&P futures saw very thin volume during the Asian session, something that forced the futures market to trade in a range smaller than 2 points (0.25%). During the European open, the S&P futures moved higher, similar to the European markets, but halted its uptrend as soon as it hit the 880.00 area, which has acted as an intra-day swing point over the last two days. 

On Wednesday, the U.S. economic calendar is relatively light, having only Crude Oil Inventories listed as a report that might move the market. As such, unless nothing out of the ordinary happens, the market is expected to retain a light volume during the U.S. session, as investors await the earnings season impact that gets underway after the Wall Street bell. The focus will be now on Alcoa’s earnings results, one of the first big companies that is expected to report its results for the second quarter.

Even though the major European indexes are posting rather small declines now, most European companies are trading below the break-even line. On the German Dax, only four companies out of the 30 members are trading in the green, and none of them advanced more than 1%, while on the U.K. FTSE, only 20 companies managed to show some signs of strength on Wednesday. The German Dax is currently trading near the 4,600 area, near the 38.2% retracement of the uptrend that was started in March, but which seems to have ended at the beginning of June. 

Overnight, the U.K. FTSE declined 10.73 points (0.26%) to 4,176.27, while the German Dax slipped 9.23 points (0.20%) to 4,588.96

Crude oil for July delivery was recently trading at $62.20 per barrel, lower by $0.10. The Wednesday’s session had been relatively light, without any major events in the commodity market.  

Gold for July delivery was recently trading lower by $1.30 to $921.50. For now, the 920.00 area seems to provide a strong support area.  

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