This morning the S&P 500 e-mini futures are declining lower by 5.00 to 1324.25 per contract. The advance in the futures from the March 17, 2011 low has been nothing short of extraordinary as the futures rallied 83.0 points in less than three weeks time. Last night the People’s Bank of China (Chinese central bank) raised interest rates by 25 basis points to 3.25 percent. China has pledged to fight inflation, however, they have taken baby steps to do it. This slow move is typical with most central banks. The central bank that controls the United States called the Federal Reserve has kept rates at zero percent since December 2008.
The Nikkei 225 Index (Japan) also declined as reports have been released that nuclear material has contaminated the ocean water. The Nikkei Index has staged a sharp bounce higher over the past two weeks and was ready for a pullback on the charts. The Hang Seng Index (Hong Kong) and the Shanghai Index (China) were closed last night for a holiday. The Sensex (India) closed lower by 0.08 percent.
WTI oil is trading lower by 0.40 cents this morning to $108.07 a barrel. The problems in Libya, and other countries in the Middle East and Northern Africa remain. Saudi Arabia is still the wild card nation in the region. Should any meaningful uprisings occur in this nation oil could see a super spike. At this time that has not yet happened, however, neighboring Bahrain continues to experience civil unrest.
Gold and silver continue to hold steady this morning. Gold is trading higher by $3.00 to $1436.00 an ounce. Silver is trading basically unchanged from yesterday’s close at $38.49 an ounce. This morning Moody’s downgraded Portugal as yields are surging higher again on Portuguese debt. The more nations that need bailouts in the European Union the more favorable gold and silver become.
The ISM Services report will be released at 10:00 am EST. The Fed Minutes report will be released at 2:00 pm EST. It is unclear if these reports will cause a reaction in the stock markets. Recently, the major stock indexes have climbed the wall of worry despite the geopolitical events or economic data in the news.
Apple Inc. (NASDAQ:AAPL) is declining a bit this morning on the back of a re-balancing in the NASDAQ 100 Index. Apple Inc. currently makes up over 20.0 percent of the index. Microsoft Corp. (NASDAQ:MSFT) is scheduled to receive a higher share of the index. Microsoft stock is trading higher before the opening bell by 0.37 cents to $25.92 a share.