European stock markets continued to move lower this morning as new figures confirmed that the eurozone economy shrank by 0.2% in the first quarter of this year, pushing the single-currency zone back into recession. Worries also rose that stronger U.S. data may mean that the Federal Reserve will start to scale back its stimulus program as soon as September. At 7:15 a.m. EDT, the FTSE 100 was down by 1.4%, while Germany's DAX was 1.1% lower. In a surprise announcement this morning, the European Central Bank said that Latvia's application to join the euro had been successful, although it warned that "a significant part of the banking sector" relies on foreign deposits, especially from Russia. This has prompted fears that Latvia might eventually experience similar problems to those of Cyprus.
Today sees the publication of the first of three rounds of U.S. employment data that are due this week. The ADP employment survey for May is due at 8:15 a.m. EDT and is expected to show that private-sector employment rose by 170,000 in May, up from 119,000 in April. Next, at 8:30 a.m. EDT, first-quarter productivity data is expected to show a 0.5% rise in productivity, compared with 0.7% in the final quarter of 2012. Finally, at 10 a.m. EDT, the ISM nonmanufacturing survey for May is expected to have risen to 54, up from 53.1 in April, while factory orders are expected to have risen by 1.6% in April, compared with a fall of 4.9% in March.
In corporate news, companies due to report before the opening bell include Cyberonics and Hovnanian Enterprises, which is expected to report a second-quarter loss of $0.05 per share, according to consensus forecasts. VeriFone Systems, Vera Bradley, and Greif are among those due to report after markets close.
Apple stock may edge lower when markets open following a ruling from the U.S. International Trade Commission that could prevent Apple from importing older models of the iPhone and iPad due to infringement of a patent owned by smartphone rival Samsung. Apple shares are 0.8% lower in premarket trading, but the firm has said it will appeal the ITC ruling, which will not come into force for 60 days.
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