Foreign Markets
Losses in the global marketplace are piling up quickly and furiously. The first trading day of the week saw heavy pullbacks. In Asia, Hong Kong’s Hang Seng slid 3.1 % to 12,861.49 and Japan’s Nikkei 225 stock average dropped 1.5 % to 7,873.98.
In Europe, stocks were down in the red following Asian losses. Britain’s FTSE 100 fell 2.4 % at 4,051.65, while the German DAX dropped 2.7 % at 4,223.17. France’s CAC 40 shed 3.0 % at 2,883.62.
U.S. Futures
Futures on Wall Street do not signal a good start to February, after a month where the Dow and S&P finished their worst January ever; falling over 8% each and down for four straight weeks. Dow Jones industrial average futures fell 109, or 1.37 %, to 7,846. Standard & Poor’s 500 index futures fell 13.20, or 1.60 %, to 809.30, while Nasdaq 100 index futures fell 21.50, or 1.82 %, to 1,157.75.
Currencies and Commodities
Crude fell off sharply with a 3.91% decline as equities tumbled globally. With the drop of $1.63, a barrel of crude on the exchange for March delivery costs $40.05. Gold lost $18.70, or 2.02% to $908.60 an ounce as the dollar strengthened in the currency market.
The euro traded at $ 1.2762, an appreciation of 0.39% for the greenback. The dollar buys you 89.26 yen, a 0.734% decline overnight. After a drop of almost 4.5 cents, the pound lost 3.054% to $ 1.4095
Corporate News
Toy maker Mattel Inc (MAT) reported 4th quarter profit falling 46% on a stronger dollar and a weak holiday season as shoppers were more diligent with their finances. Revenue fell 11 % to $1.94 billion from $2.19 billion. Quarterly profit fell to $176.4 million, or 49 cents per share, from $328.5 million, or 89 cents per share, a year earlier. The company missed both figures, as analysts had expected a profit of 72 cents per share on revenue of $2.2 billion.
Economic News
Motor Vehicle Sales: Auto and truck sales show market conditions for auto makers and the slew of auto-related companies as well as manufacturers of other big ticket discretionary goods in the domestic market. The economic consensus is for 7.7 million units for the month of January, which would be on par with December’s number. Sales on such big ticket items have really been hit hard in today’s environment. The potential lack of solvency from these large automakers is also having consumers think twice.
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Personal Income: the dollar value of income received from all sources by individuals. Consumer spending: Includes consumer purchases of durable and nondurable goods, and services.
The consensus decrease in personal income for the month of December is -0.4%., down 20 basis points since November. Consumer spending is expected to fall 0.9% from -0.6% in November.
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The ISM Manufacturing Index: The Institute for Supply Management surveys more than 300 manufacturing firms on employment, production, new orders, supplier deliveries, and inventories. The index gives a great look at the state of manufacturing and the direction it is heading. The cyclical nature of manufacturing could signal further economic downturn, and also can send off serious inflationary pressures in the economy on a higher than expected number.
The consensus figure is 32.6 for the month of January, slightly up from December’s reading of 32.4.
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Construction Spending: The report measures the value of new construction activity on residential, non-residential, and public projects, giving a great indication of the economy’s momentum. Why would you expand your operation if you think the near term outlook is bleak? The same can be said on the residential front. Public project spending puts money back into the hands of those providing the labor and thus has its own ripple effect throughout the economy.
The consensus is for a drop of 1.2% in December after dropping 0.6% in November.
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