Stock futures are lower today as buyers pause following a sharp
rally late last week.
S&P 500 futures are down almost 1 percent, while indexes are
lower by almost 2 percent in Europe. Both have been climbing from
earlier lows in the last hour. China and Japan declined by more
than a full percentage point in the overnight session.
Some attribute the drop to the Bank of Japan failing to announce
measures against market volatility, but the more likely explanation
is that the S&P 500 had stalled at the same 1640 area that was
support in late May and has now become temporary resistance.
We appear to be entering a phase of consolidation after seven
months of straight gains, with every major index except the Nasdaq
100 in record territory. A lot of good news has already been priced
into stocks, and there are few known catalysts in the near term
with the potential to push the market out of its current range.
One unknown today is a court hearing in Germany, featuring
challenges to the European Central Bank's bond-buying program. The
market, so far, expects the judges to side with the ECB. After
that, the next big event is the release of U.S. retail sales on
Commodities are following the bearish pattern as oil, copper, and
silver fall more than 1 percent. Gold is also down almost a full
percentage point, and agricultural products are mixed. The tone is
similar in foreign-exchange markets, with the safe-haven Japanese
yen up almost 2 percent against most other major currencies. The
Australian and Canadian dollars are also tanking against the
Despite the moves, however, the yen is well below its highs from
last week and appears to be consolidating. That's important because
declines in the Japanese currency have been a key factor supporting
risk appetite globally all year.
In company-specific news, Lululemon Athletica is down 13 percent
after CEO Christine Day announced she was leaving the company. The
drop comes despite quarterly results beating expectations.
Corinthian Colleges fell more than 20 percent after revealing it
was under investigation by the Securities and Exchange Commission,
which is seeking information on student recruitment, attendance,
completion, and placement.
Pharmacy-benefits company Catamaran, on the other hand, is rallying
14 percent after winning a key contract with Cigna.
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