Gap Down To April Lows, Then European Markets Bounce

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Current Futures: Dow -27.00, S&P -3.50, NASDAQ -7.75

European markets are trading in the green, even though the major regional indexes gapped and then moved lower. At the same time, U.S. futures recovered some of the declines posted earlier in the day.

European markets opened below the break-even line, having both the German Dax and the U.K. FTSE posting declines from the first few minutes of trading. This made the two indexes break below the support areas of the prior few days, and reached the lowest value since late April. However, the market moved higher shortly after, at the same time that S&P futures bounced from the 865.00 area, which held as support for over two months. As a note, S&P futures traded on stronger than usual volume during the overnight session.

The shares listed in the U.K. FTSE traded mixed, with half of the companies trading above the break-even line. As has been the case in the last few weeks, commodity stocks led the declines in the FTSE, dropping as much as 3%. However, there were some exceptions from this trend; Tullow Oil advanced 1.4% this morning, being among the top five gainers, but on light volume. At the same time, the financials traded mixed in the U.K. index, after unconfirmed sources said that Lloyds is expected to show a $21 billion loss over the second quarter, continuing the long streak of quarterly losses.

Overnight, the U.K. FTSE advanced 5.45 points (0.13%) to 4,132.62, while t he German Dax gained 8.16 points (0.18%) to 4,584.47

Crude oil for August delivery was recently trading at $59.20 per barrel, lower by $0.60. With tonight’s declines, oil retraced more than half of the uptrend that started in late April.  

Gold for August delivery was recently trading lower by $2.40 to $910.10. Gold’s outlook lies on the downside, as long as the commodity market continues to retrace its recent gains. 

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