(Menafn - ecPulse)
U.S Stock futures traded lower in pre-market trading where its seemingly following global indices down into the red zone, as European stocks edged lower along with a flat or semi-unchanged closing in Asian stocks. Investors are stepping back to re-assess the global economic outlook following Friday's jobs report from the U.S economy that showed that the U.S shed loss jobs than expected in the month of February along with the continuous problem of Greece with its huge debt problems that recently showed that it might spread beyond European nation.
U.S Stock futures are retreating which will pull the S&P 500 from the highest level in six weeks, whereas yesterday's trading stopped a six day winning streak for the index as both the DJIA and the S&P 500 shed points by closing while the NASDAQ Composite managed to add slight gains. The S&P 500 is still down by more than one percent from this year's highest level achieved due to the concern about Europe nations with its ability to repay back the huge deficit that lye upon them where Greece, Spain and Portugal all face huge amount of budget deficit along with national debt that exceeds European Union limits.
With lack of fundamentals released from the U.S economy or earnings Tuesday to help drive shares higher, investors are pulling back from markets to re-asses the global outlook which pushed indices to trade lower or close unchanged after rising severely over the past few weeks due to better than expected results from companies, along with solid fundamentals that showed that the economy is on track to recover from the worst financial crisis in decades.
Today markers the one year low anniversary for stocks, where the same day in 2008 witnessed stocks trading at 12 year record lows, however with improving conditions a year from that date and the push to the economy provided by the manufacturing sector, conditions are now better than a year ago as unemployment improved from its highest levels throughout this crisis as it reached 10.2% where its currently set at 9.7 percent along with the strong growth reported by the U.S economy in the fourth quarter of 2009 of 5.9 percent, compared with the previous reported estimate of 2.2 percent.
But overall challenges still persist in the economy, where the major concern for investors, consumers and even the government still lie with tight credit conditions that continues to hammer down activities in the U.S by limiting spending among consumers as they find it hard to obtain loans, in addition affecting companies as it limits their ability to expand their businesses and that pressures them to slash working force in order to reduce operational costs, leading to terminating more than 8.4 million jobs in the U.S throughout the crisis.
Meanwhile, investors might feel slightly optimistic today whereas the two biggest pharmaceutical companies in the world announced today that they are uniting their animal health businesses in a deal that would make them the largest veterinary industry in the world, Merck & Co and Sanofi-Aventis SA stated that the merger will enable them to control nearly 30 percent of global market for pet medicine that is estimated worth of $19.0 billion-a-year along with topping the current world dominant in that field, Pfizer Inc.
So far, indices futures shed points but expectations show that volatility will be the dominant theme for trading as lack of fundamental would cause investors to trade as they desire causing fluctuations in trading and probably end today's trading mixed, in addition investors are most probably to target the Dollar along with low yielding assets as Greece's concerns would push off investors from the Euro therefore the Dollar is expected to rise in today's trading session thus sending commodities to drop due to the inverse relationship between the two.
So far the EUR/USD pair is dropping on the daily scale where it's trading at $1.3554 compared with the opening levels of $1.3633, the GBPUSB dropped to trade at $1.4972 from the opening levels of $1.5063, meanwhile the USD/JPY dropped to $89.70 from the opening levels of $90.30. Meanwhile, Gold prices traded lower at $1117.46 an ounce from the opening levels of $1123.42 an ounce, as for Oil, it's currently trading at $80.53 a barrel compared with the opening levels of $81.71 a barrel