Asian Index Futures Signal Declines After China Rout; Oil Drops

[Purveyor]

Source: Bloomberg

by Sarah McDonaldAdam Haigh
July 27, 2015 — 6:25 PM EDT Updated on July 27, 2015 — 7:30 PM EDT

Asian equity-index futures signaled further declines after a rout in China drove global shares lower. Crude fell and the dollar held losses.

Contracts on Japan’s Nikkei 225 Stock Average sank more than 1 percent in Chicago and Osaka as the yen traded near an almost two-week high. Futures on the Standard & Poor’s 500 Index added 0.1 percent as of 8:20 a.m. in Tokyo after the measure capped its longest losing streak since January. A gauge of Chinese stocks in Hong Kong lost 0.6 percent, while Baidu Inc. slumped in late trading as earnings missed estimates. Oil slid and the Aussie dollar rebounded from near a six-year low.

The benchmark Shanghai Composite Index plunged the most in eight years to start the week, intensifying concern government efforts to prop up shares are unsustainable. The turmoil bolstered speculation the Federal Reserve will keep interest rates lower for longer. The U.K. reports on economic growth Tuesday, while measures of U.S. house prices and consumer confidence are also due.

“Extreme caution is needed here,” said Matthew Sherwood, Sydney-based head of investment strategy at Perpetual Ltd., which manages A$33 billion ($24 billion). “The return of market volatility in China will be a significant discussion point at the U.S. Fed. in terms of what this is telling us about the Chinese economy. There is a lot of global weakness and significant external risk.”

Read more: http://www.bloomberg.com/news/articles/2015-07-27/asian-index-futures-signal-declines-after-china-rout-oil-drops

[asiliveandbreathe]

1. Crude - who is running the show - well -

Several months ago Saudi Arabia made it clear they would not cut production because they were not about to give up market share. Well, since they need only $10 per barrel to make money, it doesn't take a rocket scientist to know who calls the shots and they are not about to cut production any time soon.

Technically the low in crude in January 2009 was 33.20. The current low in March of this year was 42.03 on the monthly continuation chart. Right now that chart is suggesting another wave down. The odds of that price area being reached again are high. Why? You now have in the mix the worldwide deflationary pressures taking hold. That alone could put to rest the increase in demand argument. That being the one fundamental that propped it up, it is possible that the 2009 low could be taken out.


Will we see prices drop at the pump - who knows...several US refineries have stopped production.. - go figure...

[pbmus]

2. Bet on it>>>.....