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May 29, 2015

ADVFN Newsdesk - Traders Continue To Worry About Possible Greek Default

 
ADVFN  World Daily Markets Bulletin
Daily world financial news Friday, 29 May 2015 10:40:25   
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The major U.S. index futures are pointing to a lower opening on Friday, with worries about the situation in Greece continuing to weigh on Wall Street. While Greek officials have expressed optimism about reaching an agreement with the country's international creditors, European officials have been far more pessimistic.

International Monetary Fund Managing Director Christine Lagarde told a German newspaper it is "very unlikely" a comprehensive solution will be reached in the coming days. Lagarde also acknowledged that a Greek exit from the eurozone is a "possibility" but said it would "probably not be an end to the euro."

After showing a notable move to the downside in early trading on Thursday, stocks regained some ground over the course of the session but still closed modestly lower. With the drop on the day, the tech-heavy Nasdaq pulled back off yesterday's record closing high.

The major averages ended the day in negative territory but well off their lows for the session. The Dow slipped 36.87 points or 0.2 percent to 18,126.12, the Nasdaq edged down 8.62 points or 0.2 percent to 5,097.98 and the S&P 500 dipped 2.69 points or 0.1 percent to 2,120.79.

Many of the major sectors ended the session well off their worst levels of the day, although significant weakness remained visible among natural gas stocks. The NYSE Arca Natural Gas Index fell by 1.4 percent to its lowest closing level in nearly two months.

Railroad stocks also ended the day notably lower, resulting in a 1.3 percent loss by the Dow Jones Railroads Index. With the decrease, the index finished the session at a seven-month closing low.

Steel, airline, and trucking stocks also saw some weakness, although selling pressure waned from earlier in the session.


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US Economic Reports
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Economic activity in the U.S. contracted for the first time in a year in the first quarter of 2015, according to revised data released by the Commerce Department on Friday.

The report said gross domestic product fell by 0.7 percent in the first quarter compared to the previously reported 0.2 percent uptick. The drop came on the heels of a 2.2 percent increase in the fourth quarter.

The revised decrease in GDP in the first quarter was still slightly smaller than the 0.8 percent drop expected by economists.

At 9:45 am ET, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of May. Economists expect the Chicago business barometer to edge up to 5.31.

The Chicago business barometer climbed to 52.3 in April from 46.3 in March, with a reading above 50 indicating an increase in regional business activity.

The University of Michigan is also scheduled to release its revised report on consumer sentiment in May at 10 am ET. 

The consumer sentiment index for May is expected to be upwardly revised to 90.3 from the mid-month reading of 88.6, although it would still come in well below 95.9 in April.


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European Markets

The European markets are retreating on Friday, remaining on course for a weekly loss, as mixed messages about Greece's debt talks have added fuel to investor anxiety. 

IMF Managing Director Christine Lagarde warned Thursday that Greece's exit from the Eurozone is a possibility but said it would “probably” not be an end to the euro.

Around Europe, the German DAX is losing half a percent and France's CAC 40 index is declining 0.6 percent, while the U.K.'s FTSE 100 is moving up 0.3 percent. 

Shares of Macromac Plc are tumbling in London after the Malaysia-based developer of mobile content and web-based marketing solutions reported a sharp decline in fiscal 2014 profit, despite higher revenues.

Meanwhile, Syngenta AG is advancing in Frankfurt amid reports that the agrochemical maker has rejected an unsolicited $45 billion takeover offer from Monsanto Co.

In economic news, France's household consumption grew less-than-expected in April after a slump in March, amid weaker spending on durables, figures from the statistical office INSEE showed.

German retail sales increased at a faster-than-expected pace in April after declining in the previous two months, while the eurocoin indicator, which measures the current economic situation in the euro area, rose for the sixth consecutive month in May.


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Asian markets
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Asian stocks closed on a mixed note on Friday as Chinese stocks swung widely in volatile trading after the previous session's sharp sell-off. 

While Australian shares rallied on the back of a strong performance by banks and miners, the major markets elsewhere across the region showed lackluster movements ahead of a batch of U.S. economic data.

Chinese stocks fell in choppy trading, extending Thursday's sell-off. The benchmark Shanghai Composite index briefly slid more than 4 percent before turning higher and then once again slipping into negative territory to end the session down 8.52 points 0.18 percent at 4,611.74. 

The benchmark index plunged 6.5 percent on Thursday as worries about a liquidity squeeze and stake sales of two state-owned banks by a Chinese sovereign-wealth fund rattled investors. 

Hong Kong's Hang Seng index closed down 30.12 points or 0.11 percent at 27,424.19 after tumbling more than 2 percent the day before.

Meanwhile, Japanese stocks extended their gains for the 11th straight day, with a renewed decline in the yen underpinning sentiment. The Nikkei 225 Index swung between gains and losses before closing 11.69 points or 0.06 percent higher at 20,563.15, another new 15-year closing high.

The safe-haven yen lingered near 12-year lows even as Japanese Finance Minister Taro Aso said the yen's slide in recent days had been "rough" and he would monitor moves in the foreign exchange markets carefully.

Among the top gainers, Pacific Metals, Mitsui Engineering & Shipbuilding, Mitsubishi Materials, Kubota Corp and Toshiba Corp rose 2-5 percent. 

Australian stocks also rose on broad-based strength, as a weaker Aussie dollar, higher commodity prices and rate cut hopes helped investors shrug off weak cues from Wall Street. The benchmark S&P/ASX 200 index rose 64.07 points or 1.12 percent to close at 5,777.16. 

The big four banks closed up between 1.3 percent and 2.6 percent as weaker-than-expected business investment data revived expectations of another cut in interest rates.

On the economic front, a slew of mixed reports stoked concerns about the state of the world's third-largest economy. 

The Japanese jobless rate dropped to an 18-year low, housing starts increased for the second straight month and industrial output rose 1.0 percent in April from the previous month, marking the first increase in output in three months, while household spending unexpectedly slumped and consumer inflation was muted at 0.4 percent.

Meanwhile, the Reserve Bank of Australia said Australia's private sector credit growth eased to 0.3 percent in April from the previous month, the slowest growth since October 2013, after a 0.5 percent rise in March.


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Currency and Commodities Markets

Crude oil futures are climbing $0.45 to $58.13 a barrel after rising $0.17 to $57.68 a barrel on Thursday. Meanwhile, an ounce of gold is currently-trading at $1,190, up $1.20 from the previous session’s close of $1,188.80. On Thursday, gold rose $2.30. 

On the currency front, the U.S. dollar is trading at 123.98 yen compared to the 123.95 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0976 compared to yesterday’s $1.0949.


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