Home Forex Analysis And Forecasts The S&P is currently expected to open 9 points lower

The S&P is currently expected to open 9 points lower

Stock markets are getting battered again in morning trade on Friday, as the German DAX extends its weekly losses to a staggering 5.65% taking its losses from last month’s highs until now to 10.82%.

People have been talking for such a long time about when we will get a big correction in the markets but these figures suggest that not only are they under way, we’ve actually surpassed a 10% correction and momentum is not slowing. The DAX appears to be a bit of a special case given that many of the concerns right now are focused around the slowdown in the eurozone, with poor German numbers attracting particular attention.

While US losses are lagging their German counterpart’s, both the S&P and the Dow are down 2% this week and look likely to extend these losses before the end of the week. They’re also down around 4.5% and 4%, respectively, since hitting new highs last month so the correction that people fear may be well under way. A lot has been blamed for these losses but I think it’s clear that they are being driven by fear. No one wants to be the last out and it’s become perfectly clear recently that people are uncomfortable with the current levels.

One thing that may support stocks in the coming weeks is earnings season, which unofficially started on Wednesday when Alcoa announced results for the third quarter. If we get a good earnings season that includes above expected earnings and revenues as well as minimal profit warnings and generally positive outlooks, I would expect fears to ease and people may look quite favourably on the buying opportunities that have been created.

As far as today is concerned, there is very little scheduled for release in terms of economic data or earnings, which means there is little to stop the sell-off. What we could see towards the end of the session is some profit-taking given the size of the losses over the last 24 hours.

The S&P is currently expected to open 9 points lower, the Dow 84 points lower and the Nasdaq 35 points lower.

Published On Fri, Oct 10 2014, 10:37 GMT



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