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Morning coffee brief

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The world's largest economy has now taken it on the chin in the last 9 out of 10 sessions with global and emerging market following. The old saying "sell and go away in May" seems to have been the right call for those that did just that. For the rest of us a healthy diet of risk off assets appears to be the name of the game. Image courtesy Willie Cloete: http://www.sxc.hu/profile/Pulpdtp Not unlike U.S. markets, Asian markets closed in the red again for the 6 th day in a row on the dark clouds that hang over the euro zone and Greece.

It's beginning to feel like Groundhog Day again with the cloud of uncertainty over the European crisis. Global markets will most likely be held hostage until a decision surrounding Greece is made.

Will Greece default? Will Greece leave the European Union? When Will Greece have a government?

Until the markets get clarity, sentiment should remain towards risk off which could be the norm for another 30 days or so. Headlines are now surfacing that the next round of Greek elections will take place June 17.

While Germany and France both reiterated their position to keep Greece in the European Union, Asian leaders are voicing concern about the impact the EU is having on their economic growth.

Ten year bonds in Japan fell to October 2010 levels at 0.83%. If Japan's ten year bond slips any further yields would be hovering around 2003 levels. The Bank of Japan (BOJ) announced its asset buying failed to reach the stated goal of purchasing ¥600 billion, with only ¥481 billion being purchased.

Besides the headwinds of the euro zone, Asian and emerging markets continue to be concerned about China's ability to orchestrate a soft landing after a report out by the Chinese government that China's big four state-run banks have basically issued no new yuan loans.

A look at global companies to watch today:

BHP Billiton Ltd ( BHP , quote ) officials reported it will not be sticking with its five year $80 billion capital expenditure plan. BHP officials went to say that the "tailwind of higher commodity prices is moderating".

A look at key economic data to watch today:

Today traders get a chance to see how the U.S. housing market is doing when April housing starts are released at 8:30 a.m. EDT. Analysts are expecting a 4.7% jump following March's 5.8% increase.

Traders will be focused on the Fed minutes from the most recent FOMC policy meeting 2 p.m. EDT. Traders will be going through the minutes with a fine tooth comb for the slightest indication that QE3 might be on the horizon. If traders find a hint of QE3 look for gold to react.

Other economic data today:

Live Economic Calendar Powered by Forexpros - The Leading Financial Portal

Commodity Marker - Electronic Trading

Crude oil $92.38 -1.60 -1.70%
Nat Gas $2.49 -0.01 -0.4%
RBOB-Gasoline $2.9228 -0.0213 -0.72%
Gold $1,534.90 -22.20 -1.43%
Silver $27.335 -0.745 -2.65%
Copper $3.458 -0.0595 -1.69%
U.S. dollar index 81.575 +0.195 +0.24%
as of 7:21 a.m. EDT

Precious metals corner

Gold and silver continued their slide on Tuesday. Gold is down over 1.40% and silver off by more than 2.20% in early morning trade. Historically gold and silver played the role of safe havens during the last euro zone crisis. What's different this time is the risk of inflation on fiat currencies is missing; currently there are no concerns about inflation.

ETF holdings

Holdings in the world's largest gold backed ETF, the SPDR Gold Trust ( GLD , quote ) held steady at 1,277.11 tons as of May 15.

The iShares Silver Trust ( SLV , quote ) moved up slightly to 9,516.40 tons on May 15. SLV is the world's largest silver backed ETF.

Fundamental outlook

Precious metals are beginning to accelerate to the downside in early trading as the euro zone and Greece continue to produce headlines once again today. Technicals on both gold and silver will continue to put pressure on, while the euro crisis will continue to weigh on the precious metals sector for the trading week and both metals could be now heading to 52 week lows.

Looking at the pre-market we find:

Early pre-market activity is being dominated by U.S. retail names ahead of the 8:30 a.m. EDT retail numbers.

The earnings calendar remains quiet for the remainder of the week with no names reporting on the Emerging Money Index until next week. Next on deck:

MBT - 5/21/12 before the bell.

Emerging Money Index Dividend Watch:

TEVA - 5/17/12

Bottom line : U.S. futures are suggesting a flat open today after the Dow fell 9 out of 10 sessions for the month of May. Until Greece and the euro zone lift the cloud of uncertainty, look for global market sentiment to be risk off. With elections now looking to be June 17, markets may find some support until then but will be held hostage to the event.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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