U.S. stock index futures are moderately lower after a down session in Asia, where Japan's Nikkei broke the 10,000 level, and a moderately negative session in Eurozone and U.K. markets.
The weakness is being attributed to the prospect of dollar weakness and euro strength being targeted by the G-7. The euro is weaker this morning, and the dollar is stronger. That has helped push down commodity prices.
Tech futures took a dip after Cisco Systems (CSCO) announced a cash purchase of Tandberg in a deal worth $3 billion.
Today's economic calendar is also extraordinarily heavy, which may be increasing the potential for cross-currents. The announcement that CEO Ken Lewis would resign at Bank of America (BAC) has helped that stock, now up 1.7 percent at time of writing, but has not helped other banking shares.
Among sell-side research analysts, Jefferies upgraded Consolidated Edison (ED) to "buy." William Blair raised fiscal 2009 and 2010 estimates for Goldman Sachs (GS).
The earnings calendar for tomorrow is empty. Remember that earnings season begins next week with Alcoa (AA) on Oct. 7.
The NYBOT U.S. Dollar Index is stronger, which has helped lower commodity prices. Commodity-producing nations such as Australia, Brazil, and Canada may underperform on the weaker price outlook. Foreign shares in general underperform when the dollar is stronger.
The S&P Select Materials SPDR (XLB) and Energy Select Sector SPDR (XLE) may be fall under pressure as long as the strong-dollar/weak-commodity relationship continues. The iShares MSCI Australia Index Fund (EWA), MSCI Brazil Index (EWZ), iShares MSCI Canada Index Fund (EWC), and the underlying of each ETF may also underperform in the weaker commodity environment.
