There is no big market-moving news from Europe. US economic data disappoint. S&P futures suggest a flat to slightly lower open.
It is getting harder each day to determine whether there are in fact any significant developments from Europe. Every sneeze by every politician in every country makes a headline. Some headlines are important, but most are rehashes of previous headlines.
This morning, the head of the European Central Bank, Mr. Draghi, has called for a banking union in Europe. This essentially entails more unified and centralized control over banks. That can be taken as a slight positive for equities. It may not happen overnight, but talk of pan-European reform aimed at stability might alleviate some of the anxiety.
European stock exchanges are up fractionally, helped by some good economic numbers in Germany (which really should be no surprise).
All in all, nothing bad out of Europe. That had S&P futures higher until some slightly disappointing US economic releases.
The ADP employment data showed a 133,000 gain in May private payrolls. New claims for unemployment for the week ended May 26 popped up to 383,000 from 373,000 the prior week. First quarter real GDP was revised to a 1.9% annualized gain from the original report of 2.2%. All of these data were slightly weaker than expected.
There is nothing dramatic in these numbers. They won't alter expectations of about a 150,000 gain in May nonfarm payrolls in tomorrow's report, but in aggregate they took a little wind out of the S&P futures.
This is the final day of a very bad month for stocks. Hedge fund activity under these conditions can sometimes lead to a pop in the market, or at least some increased volatility. Tomorrow, the market could be volatile not just on European headlines, but also as a result of the employment report.
Founder and Chairman, Briefing.com