The U.S. Futures Fall In Early Trading
The U.S. index futures are indicating a lower open in early Friday trading. The move was sparked by an airstrike by U.S. forces that killed top Iranian general Soleimani. Soleimani, the head of Iran’s elite forces, was killed in a retaliatory strike while in Baghdad. Oil prices spiked on the news, rising more than 4%, and will likely move higher before this situation is played out. The NASDAQ Composite led the decline with a loss of -1.32% while the S&P 500 and Dow Jones Industrial Average fell about -1.05%.
The VIX, a measure of volatility and fear in the market, jumped nearly 25% on the news. The jump in volatility points to a possible correction in equities that could spell the end to the 2019/2020 stock market rally. Airline stocks were among the hardest hit, down -2.0% on rising oil prices, while safe-haven assets like gold and U.S. treasuries moved higher. In stock news, there were no major earnings reports this morning. On the economic front, key reads on manufacturing and construction spending are due out at 10 AM.
Europe Falls, Mideast Tensions Threaten Market Stability
European markets are down at midday on Friday following the killing of Soleiman. The German DAX led the decline with a loss of -1.70% while markets in England and France posted much smaller losses. Travel & Leisure were among the hardest hit with average losses of -1.7%, airlines Lufthansa and AirFrance both shed about -7.0%.
All sectors are moving lower at midday save the energy sector. Tullow Oil is the top gainer with an advance of 3.0%. The move in Tullow is a strong one but should be taken with a grain of salt, Tullow is under intense downward pressure following poor test results at a key development project.
Asian Markets Are Mixed At The End Of Friday’s Session
Indices in Asia finished the session mixed because of the news out of Iraq. The Shanghai Composite and Hong Kong Hang Seng both posted small losses. The Korean Kospi and Australian ASX both moved higher. In Australia, all sectors advanced. Japan was closed for a holiday.
The situation in the Mideast will be closely watched by the market in the coming days. The attack on Soleimani will not likely be overlooked by Iran’s central government. The government has already vowed to retaliate and may spark an all-out war in the region.
This article was originally posted on FX Empire
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