Tuesday Morning Cheat Sheet: 3 Stories Moving Markets
The markets closed lower in Asia on Tuesday. The Nikkei fell 0.28 percent after a slight increase in the strength of the yen to 95.920 to the dollar helped encourage investors to take profit from exporters and financials, which have been performing well recently. The Hang Seng fell 0.87 points, while the S&P/ASX 200 was off 0.56 percent.
In Europe, an unexpected 1.5 percent decline in British manufacturing output revitalized fears that the region would re-enter recession. The pound fell to a 4.5-year low against the dollar before recovering slightly. However, as New York woke up and headed toward its opening bell, London’s FTSE was trading flat at +0.04 percent, while Germany’s DAX was down just 0.08 percent, and the STOXX 50 index was off 0.21 percent.
U.S. futures at 8:40 a.m.: DJIA: -0.10%, S&P 500: -0.13%, NASDAQ: -0.21%.
1) “This is the penultimate nail in the coffin in terms of triple-dip — it’s pretty much game over now,” said Alan Clark, an economist at Scotiabank, about the U.K. manufacturing drop to Reuters. “Unless we have a stellar performance from the services sector, we’re almost certainly in a triple dip.”
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Manufacturing output for the region was expected to remain flat, but ended up declining 1.5 percent. A shutdown of Schiehallion, an oil field in the North Sea that accounts for as much as 6 percent of Britain’s oil production, contributed to a 1.2 percent contraction in energy production and mining output. If Britain falls back into recession this quarter, it would have technically re-entered recession for the third time since the beginning of the crisis.