Morning Call For June 2nd
Today, US futures look to open positive after weak US economic data and a Moody’s downgrade of Greek debt, putting it on par with Cuba, force overseas markets lower with Asian, European and emerging markets all down in early trading. Asian markets saw their first negative session in three days, as major exporters Samsung and Sony took a beating. Japanese car-makers, Honda Motor and Toyota Motor, also sold off on slowing US sales. Overall the MSCI Asia Pacific index declined as much as 1.8%.
In Europe, the risk of a Greek default was raised to 50% by Moody’s, sinking the Stoxx Europe 600 by 0.8%. A significant decline for the broad European index, given those markets in Switzerland, Austria and Sweden are closed for Ascension Day holiday. The Greek downgrade by Moody’s from B1 to Caa1, put the country on par with Cuba.
As investors sold the SPDR S&P 500 (NYSE:SPY), the US dollar was able to pair losses and finish green, ultimately sending commodities lower. Crude oil, copper and the iShares Silver Trust (NYSE:SLV) all saw persistent selling pressure, while the SPDR Gold Trust (NYSE:GLD) exhibited relative strength.
Market leaders also saw tremendous selling pressure, as Netflix (NASDAQ:NFLX), Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) were positive early before closing the day red. Cloud stocks attempted a breakout after weeks of consolidation, but VMWare (NYSE:VMW) and Acme Packet (NASDAQ:APKT) all failed hold new levels, eventually closing near intraday lows. Juniper Networks CEO, Kevin Johnson, adding to selling pressure on the markets when he said the networking company would not be immune to federal spending cuts, while adding there would supply chain problems caused by the Japan Earthquake.
The poor US economic data hit banks hard, with Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) leading financials and the markets lower… extending months of relative weakness.
On a positive note, VirnetX Holding (NYSE:VHC) continued to rally following a Cowen Group upgrade, meanwhile Expedia (NASDAQ:EXPE) struck a deal with Groupon to offer discount travel, sending Expedia’s shares higher late in the session.
Blackstone’s Byron Wien calls the market decline a huge buying opportunity, as the 78 year old adviser is also credited with calling the 2009 bottom. Can stocks rebound with more potentially disappointing US economic data on the way?
Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the service and acts as the face of T3 Live. Mr. Redler focuses on thorough preparation and discipline as a trader. Scott Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Scott moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, he maintained his status as a top trader in the industry while working closely with all traders in the firm to dramatically increase performance. Scott has participated in more than 30 triathlons and one IronMan triathlon, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business and Bloomberg, and he has been quoted in the Wall Street Journal and Investor’s Business Daily among other publications. Scott produces much of the media and content available to subscribers and followers. T3LIVE.com is an online financial media network and education platform that provides active traders and investors with market analysis, real-time access to strategies, and in-depth training from real traders, real-time.
Check out T3Live.com’s Virtual Trading Floor to follow these traders and their live portfolios on real-time throughout the day! Take a free trial.
*DISCLOSURE: Scott has no positions