Global Equities Struggle For Direction, EUR/USD Slumps To New Low, Boeing Raises Guidance

Asian Markets Mixed Amid Fears Of Slowing Growth

Asian indices closed the Wednesday session mixed following Tuesday’s deep declines. Fear of slowing growth has gripped the market despite word from the PBOC it would work to support economic activity in China. The Korean Kospi led decliners with a loss of 0.40% and was closely followed by the Hong Kong Heng Seng Index. Japan’s Nikkei led advancing indices with a gain of 0.37% followed closely by China’s mainland Shang Hai index. Energy stocks were among the regions biggest losers as oil prices move to a new two-month low.

Oil prices fell hard in Tuesday’s US session leaving the price of WTI sitting on a key support level near $66.00. The move began last week when US crude oil inventories increased 4X the expected amount offsetting fears sanctions against Iran would tighten the market. Yesterday’s mass sell-off was sparked by word from Saudi Arabia it would work to ensure global oil markets remain well supplied. The move trimmed 5.0% from the price of WTI and has the price near the bottom of a short-term trading range where it may find support.

The EUR/USD Falls As Economic Activity Falls Short Of Expectation

European indices moved higher in the first half of the EU session with the CAC leading the charge advancing more than 1.15%. The DAX and FTSE were not far behind, each, posting gains in the range of 1.0%, and all three indices supported by earnings. In France, shares of Kering and Societe BIC advanced more than 8.0% on better than expected earnings. Kering, the owner of iconic brands like Gucci, says sales are strong and gave a favorable outlook.

The EUR/USD fell hard during the EU session on weaker than expected economic data. The EU Purchasing Managers Index shows expansion within the EU is still happening but at a slower rate than in the previous month and much slower than expected. The reported 52.7 for the composite figure, both manufacturing and services, fell 1.4 points from previous and missed expectations by 1.2 points. The data raises concerns that EU growth is slowing faster than expected which is an indication the ECB may need to prolong its QE program past the indicated December end-date. The ECB will release its policy statement on Thursday and will likely produce a market moving event.

US Futures Make Triple Digit Swing

In the US equity futures went on a wild ride in the early pre-opening session. The Dow was indicated to open with a triple-digit loss until the release of earnings by Boeing. Boeing reported better than expected top and bottom line issued, a favorable outlook for its business, and raised full year guidance which resulted in a 5% gain for the shares of the stock. Other notable earnings in the pre-market session include AT&T and UPS. AT&T missed on the top and bottom lines sending shares down by 3.0%, UPS reported figures that were only as expected and sent shares of that stock down more than 2.5%.

Today’s action is going to be dominated by two things; earnings and the FOMC. A host of important earnings are due out after the bell including Barrick Gold (BKX), Ford (F), Microsoft (MSFT), and Visa. Before that look out for the Fed’s Beige Book which is due to be released at 2 PM EDT.