Spanish bond yields are now trading above 6.0 percent on their 10 year note. This rise in bond yields has normally been very problematic for all of the major stock market indexes, however, today the European markets do not seem to be negatively affected by the spike in the Spanish yields. Most of the leading European stock indexes are actually trading higher on the session.
The S&P 500 Index e-mini futures (ES-M2) are also trading higher before the opening bell at the New York Stock Exchange. This tells us that traders and investors should simply focus on the U.S. Dollar Index. Remember, as long as the U.S. dollar declines during the trading session, the major stock indexes will usually inflate and trade higher. Some equities that could experience some early weakness due to the rising Spanish bond yields include Banco Santander, S.A. (ADR) (NYSE:STD), and the iShares MSCI Spain Index (ETF) (NYSEARCA:EWP).
Last night, most of the Asian stock markets finished lower. The biggest loser last night was the Nikkei 225 Index (Japan) which ended lower by 1.74 percent. This tells us that the Japanese ADR's could be under pressure today if the U.S. markets are weak. Many of the leading Japanese ADR's such as Sony Corporation (ADR) (NYSE:SNE), Canon Inc. (ADR) (NYSE:CAJ), Toyota Motor Corporation (ADR) (NYSE:TM) are already oversold in the near term, therefore, downside could be limited.