The major stock indexes are all coming under pressure this morning as the S&P 500 e-mini futures (ESM1) are trading lower by 8.00 points to 1310.75 per contract. Corporate earnings season is under way this week as countless stocks will report earnings. Citigroup Inc. (NYSE:C) was one of the leading financial stocks that reported earnings this morning. The stock is trading higher by 0.05 cents to $4.47 a share. The earnings for Citigroup were very similar to what J.P. Morgan Chase & Co. (NYSE:JPM), and Bank of America Corp. (NYSE:BAC) reported last week. Goldman Sachs Group Inc. (NYSE:GS) is scheduled to report earnings tomorrow before the opening bell. It will be interesting to see the markets reaction to this leading financial stock. Goldman Sachs Group has come under some very negative press recently after a U.S. Senate report places a lot of the blame on the company for the financial crisis in 2008.
The Asian markets were mostly lower last night. The Hang Seng (Hong Kong), Nikkei 225 Index (Japan), and the Sensex Index (India) were all lower last night. The highly followed Shanghai Index (China) actually scratched out a gain last night finishing higher by 0.22 percent. The Peoples Bank of China increased it’s reserve requirement ratio by 50 basis points to try and curb inflation and to stop a supposed housing bubble. The Asian market weakness could weigh on the U.S. markets this morning.
The U.S. Dollar Index (DXY) is soaring higher this morning by 0.54 cents to $75.43 a share. The strength in the U.S. Dollar Index comes as debt yields are spiking higher in Greek bonds. Yields on Spanish debt is also increasing on short term maturities. Spain is the next country on the list to likely need a bailout. When the U.S. Dollar Index trades higher the major stock indexes will usually deflate and come under pressure. Traders should always be careful of the U.S. Dollar Index when it starts out strong. Often the U.S. Dollar Index will fade from the high once the opening bell rings at the New York Stock Exchange.
Gold and silver are trading slightly lower this morning. Should the U.S. Dollar Index fade or decline after the opening bell it would be prudent to expect gold and silver to rally higher again. The daily chart trend for the precious metals is still in a strong uptrend at this time.