Judging from the direction of U.S. stock futures, it looks like another broad selloff is in the wings today on Wall Street. Negative international markets coupled with renewed weakness in oil prices look like they will keep investors cautious as the week begins.
S&P 500 Futures are steeply down over 1% while Nasdaq Futures slipped 1.60% to 3,958. The losses continue last week’s turbulent markets. Stock traders will be attentive to what Federal Reserve Chair, Janet Yellen, has to say about monetary policy during her testimony to Congress on Wednesday.
Another development that could upset the market is the reversal in oil gains today for lack of any clear signs of an agreement between OPEC and non-OPEC members about an oil output cut. A formal meeting in between Saudi Arabia and Venezuela over the weekend, though termed as successful by political leaders, failed to boost the oil outlook.
Developments around the globe
On the other hand, European stock markets experienced an extremely rough ride today that pushed them to their lowest levels since 2014. Decline in business confidence in the UK alongside weak investor morale in the Eurozone intensified fears that the global economy is on the verge of a major slowdown. At the same time, Asian markets witnessed narrow low-volume trade as most of the key markets remained closed on account of the Lunar New Year in China.
Investors around the globe seem to have been OK with the third straight drop in China’s foreign reserves in January. Foreign reserves in China hit four years lows in December as the People’s Bank of China sold dollars to protect the yuan.
Given the volatility across the globe, Gold futures registered a hefty jump today as the metal traded near three-month highs. Gold for April delivery was up by 1.39% or $16.10 as it hit a high of $1,175.60 today.