Overseas markets have been in full retreat overnight and into this morning with the Hang Seng dropping 2.0%, the Dax down 0.7% and the FTSE falling 0.5%. US index futures are mixed with NASDAQ futures up 0.15% and Dow futures down 0.25%.
Retail sales from the UK (-0.2% vs street +0.2% and previous 1.7%) and Canada (-1.3% vs street -0.5% and previous 1.7%) were very disappointing and have raised questions about whether the world economy is sliding into a recession, impacting investor sentiment. A larger than expected outright decline in Canadian raw material prices (-1.4% vs street -0.7%) may also have investors wondering about the state of global demand for resources.
Gold and Silver have come under pressure overnight, falling 2.0% and 3.4% respectively, while cryptocurrencies are climbing with Bitcoin up 1.3%. Commodities are also in retreat today with US Crude Oil down 0.2%, Natural Gas down 2.7%, and Copper down 0.5%. The US 10-year treasury note yield has started to creep back upward, approaching 4.25% once again.
There is been a major, worldwide IT outage, apparently triggered by a glitch in a software update impacting Crowdstrike* (down 13.5% premarket) security software, and Microsoft* (down 1.5% premarket) operating systems. The airline sector has been particularly impacted with several major airlines being forced to temporarily ground flights but their share prices have not been impacted very much.
Earnings season continues this morning. Netflix* is up about 1.0% in premarket trading after beating street expectations on earnings ($4.88 vs street $4.74) although sales guidance came in soft. American Express* beat the street ($4.15 vs street $3.26) on earnings but is down 2.0% premarket after sales fell short of expectations.
*Shares of Netflix, Microsoft, Crowdstrike, and American Express are held in portfolios managed by SIA Wealth Management.