Downbeat Start Likely for Markets

LONDON -- The Dow Jones Industrial Average (INDEX: ^DJI  ) and the S&P 500 (INDEX: ^GSPC  ) are expected to open lower this morning, according to futures markets at 7 a.m. EDT.

Overnight, the World Bank announced that it had cut its growth forecast for China, with World Bank economist Bert Hofman telling a briefing in Singapore that China was experiencing a "double whammy" of weakening exports and falling domestic demand. The World Bank has cut its growth forecast for China to 7.7% for this year and 8.1% for next year, emphasizing that it still expects a soft landing for the economic giant.

Today's Columbus Day holiday means that no economic data is scheduled for release in the U.S., so investors' attention is likely to be focused on China and on the latest developments in the eurozone crisis.

Investors may also be cautious about taking large new positions ahead of the start of this quarter's earnings season, which gets underway this week. The first of the major quarterly results is due after the closing bell on Tuesday, when Alcoa, often considered to be a bellwether for the wider economy, releases its latest update.

Shares in Apple (Nasdaq: AAPL  ) were down in premarket trading this morning and may drop further today after China's Foxconn, which assembles iPhones, announced that it had been forced to halt production for the second time on Friday due to ongoing labor disputes.

European markets
In Europe, the World Bank's revised forecast for Chinese growth contributed to falls across the board this morning, with most major European indexes trading lower by 7 a.m. EDT. The DAX was down 1.4%, the CAC was down 1.1%, the FTSE MIB was down 1.8%, and the IBEX was down by 0.9%.

In London, the FTSE 100 (INDEX: ^FTSE  ) was down by 0.7% at 7 a.m. EDT as mining and financial shares shed value on fears over weakening global growth and the ongoing stalemate in the eurozone, where negotiations over Greek cuts are continuing today at a meeting of the eurozone finance ministers in Luxembourg. There was one bright note, albeit a formality: The long-awaited Eurozone Stability Mechanism will be formally inaugurated later today. The ESM is intended to be used to bail out struggling eurozone member states.

Billionaire investor Warren Buffett does not usually invest outside the U.S., but he did recently invest $1 billion in a well-known British blue-chip brand, expanding his stake in the company to more than 5%. This famous British name has global expansion potential -- and you can discover the identity of the company and the price he paid in this special exclusive report. Best of all, the report is free -- so download it today while it's still available.

Are you looking to profit from this uncertain economy? "10 Steps To Making A Million In The Market" is The Motley Fool's latest report. We urge you to read it today -- your wealth could be transformed. Click here now to request your free, no-obligation copy. The Motley Fool is helping Britain invest. Better.

Further investment opportunities:

Roland Head has no shares in any of the companies mentioned in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2047239, ~/Articles/ArticleHandler.aspx, 9/19/2014 10:08:40 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement