Courtesy of John Nyaradi.
Courtesy of NASA
Silk Road trouble including a cooling Chinese economy and continued European sovereign debt crisis fears with Spain on center stage bring world markets lower before US Market open.
On Thursday, U.S. stock index futures were lower as investors continued to worry about the outlook for China’s (NYSEARCA:FXI) economy and Europe’s (NYSEARCA:FXE) efforts to stop to the growing sovereign debt crisis.
Market watchers kept their eyes on the 8:30 a.m. ET releases of the March 24 weekly initial jobless claims which showed continued improvement, and the revised fourth quarter Gross Domestic Product report, which came in unrevised at 3%.
Also on tap for Thursday are additional remarks by Federal Reserve Chairman Ben Bernanke. He will present his last lecture at 12:45 p.m. ET on the central bank’s history.
Dow Jones Industrial Average (NYSEARCA:DIA) futures dropped 22 points to 13,031. S&P 500 Index (NYSEARCA:SPY) futures fell 2.4 points to 1,397.80 and the Nasdaq 100 (NASDAQ:QQQ) futures were off 4 points to 2,764.
Over in Europe, the Stoxx Europe 600 Index fell 0.5 percent. This was spurred by more trouble in Spain (NYSEARCA:EWP) on Thursday with a national strike protesting the government’s austerity measures. On Friday, a new budget plan will be presented for the country.
On Wednesday, Spain and European Union renounced reports that the country had been advised to obtain bailout money from the International Monetary Fund and the EU to help with its banking restructuring.
In Asia, share prices also fell as Chinese (NYSEARCA:FXI) corporations saw large losses and worries continued about the global economy.
Hong Kong’s Hang Seng Index declined 1.3 percent, and the Shanghai Composite index dropped 1.4 percent.
Japan’s Nikkei Stock Average fell 0.7 percent and the South Korean Kospi lost 0.9 percent.
Japanese commodity trading firms came under pressure with Mitsui & Co. falling 3.3 percent and Mitsubishi Corp. dropping 2.8 percent.
Nymex crude-oil futures (NYSEARCA:USO) dropped 44 cents to $104.97 per barrel.
Gold (NYSEARCA:GLD) futures decreased $3.30 to $1,654.60 per ounce.
The dollar index (NYSEARCA:UUP) increased 0.1 percent to 79.206.
Bottom Line: Despite a lag on global markets, specifically silk road markets including China and Europe, the US continues to lower unemployment claims and continue on a steady, if miniscule growth path as indicated by today’s initial jobless claims report and unrevised GDP report. With reports of Spain being rocked by strikes (think Greece round 2) in protest of further austerity measures, one cannot help but wonder how long US markets and the economic recovery will continue to perform under such strong, negative international pressure.
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