Worries over slowing Chinese growth and tensions over Ukraine had markets in turmoil after sharp losses out of Hong Kong and Tokyo started to repeat in Europe. U.S. equity futures are pointing to a slightly lower open after falling sharply during yesterday’s session. Copper was in the spotlight overnight after prices fell to their lowest level in four years. Slowing growth stories in China and liquidation issues are the main reasons for the slide. Oil futures (/CL) are also down in unison and have broken through $100 a barrel. The CBOE Volatility Index (VIX) was slightly higher yesterday despite the major slide in equities. We should see option buying remain strong if stocks remain in negative territory after the opening bell.
Treasuries are modestly higher this morning after a minor upturn yesterday. If stocks remain weak we could see the ‘Risk-off’ trade accelerate today. Global equities were lower led by Japan which was off by over 2%. The tensions between Russia and the Ukraine could intensify as the March 16th deadline approaches for the vote on Crimea. The economic calendar is light today so focus should remain on the geopolitical issues.
Stock Stories:
General Motors (GM) –Inquiry – The Department of Justice is reportedly investigating General Motors (GM) over whether the company is criminally liable for its failure to properly disclose the problems with ignition switches that have been linked to the deaths of 13 people and which prompted the firm to recall 1.6M vehicles.
Major Economic Reports:
6:00 am CT – MBA Mortgage Applications – Down 2.1% for week
