Currency Markets Are In Control
Nicholas Santiago | Jun 14, 2013 12:24PM ET
This morning, the S&P 500 Index e-mini futures (ES-M3) are trading lower by 3.75 points to 1606.25 per contract. It seems that the major stock indexes are continuing to trade right along with the USD/JPY chart. Last night, the USD/JPY traded down to $93.80 causing a massive 6.35 percent decline in the Nikkei 225 Index (Japan stock market). Anytime the Japanese Yen strengthens against the U.S. Dollar it causes sell offs in stocks around the world. Should the USD/JPY strengthen (Japanese Yen declines) then the major stock indexes will likely recover and trade higher. Simply put, the currency markets control the stock markets around the world right now.
Last night, the Shanghai Index (China) reopened for trading after a holiday. That important stock index also plunged lower by 2.84 percent. This tells us that the leading Chinese ADR's could be under pressure if the U.S. stock indexes are weak today. Some leading Chinese related equities that could be volatile this morning include Baidu Inc. (BIDU), SINA Corporation (SINA), Youku Tudou Inc. (YOKU), and the Market Vectors China ETF (PEK).
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