Regional holidays and commodity-related share weakness impacted Asian stock markets today with China’s Shanghai Composite’s down 1.5% following a 3.2% decline on Friday. The Dow Jones Stoxx 600 Index of European shares also edged down for a second day, down 1.1%. The MSCI Asia Pacific excluding Japan Index fell 0.6%, led by mining and financial companies. The drop in U.S. futures indicated the S&P 500 may slide after two straight weekly gains. Last week’s gains sent the S&P500 up 2.5% and 18.3% year to date as oil prices have rallied 61.5%; gold prices have advanced 14.2%; the yield on the 10-year has gone from 3.34% to 3.47%. Volatility, as measured by the CBOE Vix, has fallen by 40%. The US dollar strengthened against 14 of the 16 most-traded currencies
The week ahead will show to be a busy one. Leaders from the Group of 20 nations meet in Pittsburgh this week to increase financial regulation in the global economy as the President continues his busy media coverage, addressing economic expectations. Today the Fed begins its 2-day interest rate policy meeting, with its rate decision Wednesday expected to maintain an interest rate target of 0.0% to 0.25%. In addition, a multitude of initial public offerings are expected, the most offerings since December 2007.