Tuesday May 29th

29-05-2018

Dow is set to drop 200 points at the open as worries about Italy roil world markets

U.S. stock index futures dropped sharply ahead of Tuesday's open, as investors turned their attention to data and earnings amid a stormy geopolitical climate. Around 7:10 a.m. ET, Dow futures indicated a drop of more than 200 points at the open. The Nasdaq and the S&P 500 futures also indicated sharply negative starts to the session for their respective markets. The moves in pre-market trading in the U.S. came amid turbulence for European markets and politics alike. The Stoxx Europe 600 fell 1.3 percent, weighed down by a 2.9 percent drop in Italy's FTSE MIB and a 2.4 percent decline in Spain's IBEX 35. In Asia, stocks finished the session in the red, as the eurozone's political turmoil depressed markets worldwide. Japan's Nikkei 225 declined 0.55 percent, or 122.66 points, to 22,358.43 amid broad-based losses, with strength in the yen weighing on major exporters. Over in South Korea, the Kospi fell 0.88 percent to 2,457.25 as gains in some technology names failed to lift the broader index. Elsewhere, the Hang Seng Index slid 0.88 percent by 3:05 p.m. HK/SIN, hurt by losses in the heavily weighted financials sector. Shares of insurer AIA, in particular, fell 1.79 percent before the market close. On the mainland, the Shanghai composite gave up early gains to close 0.47 percent lower at 3,120.47 and the smaller Shenzhen composite dropped 1.07 percent. 

The euro fell 0.7 percent to $1.154 — its lowest level this year against the greenback — as Italian debt rates continued to rise. The possibility of early elections in Italy continued to have an effect on markets during Europe's early trade, while U.S. stocks will be opening back up Tuesday after a long weekend that saw markets closed Monday for Memorial Day. While geopolitical concerns continue to shake up sentiment in Europe, investors are likely to remain on edge in the U.S., as the future of talks between North Korea and the U.S. keeps investors on their toes. Last week, President Donald Trump made the decision to cancel a key nuclear summit between himself and North Korea's Kim Jong Un. On Friday, however, Trump said that the U.S. administration had restarted its dialogue with the Asian country, and suggested that a meeting could still take place. North Korea has sent some of its top officials to Singapore and the U.S.,Reuters reported Tuesday citing Asian media outlets, suggesting that the on-again-off-again summit between the two countries could still happen. In other markets, oil prices showed a mixed picture, with Brent posting minor gains, while U.S. crude futures posted solid losses, as concerns over increased crude output lingered. Brent crude futures were up 21 cents, or 0.28 percent, at $75.51 a barrel at 0635 GMT, after settling at their lowest since May 8 at $75.30. U.S. West Texas Intermediate (WTI) crude was down $1.11, or 1.64 percent, at $66.77 a barrel, sitting around its lowest since April 17. Looking to Tuesday's session, Booz Allen Hamilton, Momo, Salesforce.com, HP and Heico are scheduled to publish their latest corporate earnings. In data, the S&P/Case-Shiller house price index is set to be released at 9 a.m. ET, followed by consumer confidence at 10 a.m. ET and the Dallas Fed's manufacturing survey at 10:30 a.m. ET. Gold prices inched up on Tuesday after falling for the two previous sessions, but remained under pressure on hopes a U.S.- North Korean summit was back on track and as the U.S. dollar hovered near 6-1/2-month peaks. Spot gold was 0.2-percent higher at $1,300.20 per ounce at 0057 GMT. U.S. gold futures for June delivery fell 0.3 percent to $1,300 per ounce.