U.S. stock futures were significantly lower Monday morning, pointing to a much weaker start for Wall Street as investors' concern over the strength of the global economic recovery grew and overseas markets sold off.World stock markets skidded Monday amid growing anxiety about the pace of the global recovery spurred by concern over consumer outlook in the U.S. with China's Shanghai index declining 5.8%, leading declines across Asia. Leading European markets fell some 12% by midday trading there.
What's interesting is that all this was on the backdrop of news of a rebounding Japanese economy, which climbed out of its yearlong recession in the second quarter, expanding 3.7%, the government said Monday. With that, it joined Germany, France. But it seems the cautious notes economists and politicians sounded overtook sentiment on this positive news as the main driver of growth was exports and that domestic consumer spending remained fragile amid plunging incomes and rising unemployment.
Further, oil prices fell below $66 a barrel Monday as investors worried that crude demand will recover only slowly in the U.S. and other regions just posting economic growth. A sharp drop Friday in the Reuters/University of Michigan consumer sentiment index, traditionally a sign for crude demand, triggered a selloff.
Investors will also try to get a feel from a couple of economic indicators due out this morning: At 8:30 a.m. Eastern, August Empire State manufacturing survey will be released. Then, at 1 p.m. August home builders' index will be reported.
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Reader Comments (Page 1 of 1)
8-17-2009 @ 8:12AM
Kerry said...
Out of a job yet, keep buying foreign. With more and more Hondas and Toyotas in the parking lots its no wonder Japans economy has bounced back. Aren't Americans wonderful. Great job taking care of your own. Keep on supporting Japan's national healthcare, and Japan's children's education.