In overnight trade, concerns ahead of the Q2 GDP read and Ben Bernanke’s speech saw the major indices finish lower, erasing early gains that had come from a bigger than expected decline in the number of US jobless claims.
Also, comments from the Federal Reserve Bank of Kansas City that manufacturing growth had stalled across the region certainly didn’t help.
The NASDAQ was the worst performer for the session, down 1.1% while the S&P 500 and Dow Jones Industrial Average fell 0.8% and 0.7% respectively.
Across Asia, regional markets are all lower following weaker overseas leads, and ahead of the Q2 GDP read and Bernanke’s economic speech. The Shanghai Composite is the worst performer, down 0.3% while the Kospi, Hang Seng and Nikkei 225 are all softer by 0.1%.
The ASX 200 has moved into positive territory in early afternoon trade, currently 0.2% firmer at 4364. The move higher is a little bit surprising; one would usually expect selling pressure ahead of crucial economic data and following weak US leads. Nonetheless, the consumer staples and discretionary stocks are adding most of the points, while the materials and energy sectors are still in red, although are well off their lows.
Turning to Europe, the week's final session is likely to be defined by the GDP releases due out of both the UK and US, plus Bernanke's speech from the Fed's summer meeting in Jackson Hole. Any assessment of the economic outlook will potentially be grasped by traders. However, it would seem a big ask to try and convince what appears to be an increasingly skeptical market that the future is going to be all that bullish.
Earnings news from luxury retailer Tiffany, Spanish Airline Iberia and the UK's Rightmove will also provide some direction. Each of these offers an insight to a range of significant sectors, whilst takeover target Dana is also due to report. The long weekend in London could leave the UK market looking somewhat lacklustre in the hours ahead and may increase the defensive mindset further.
Ahead of the open, we're calling the FTSE down 19 at 5137, the DAX down 35 at 5878 and the CAC down 24 at 3451.
