North American stock markets could open lower on Tuesday. Index futures were down and overseas market performances mixed, as investors weighed disappointing news about the services side of the economy as well as fresh rumours of more government stimulus.
Germany’s services industry grew less than expected last month, according to the latest purchasing managers survey, further suggesting that Europe’s strongest economy is being pulled in to the region’s economic malaise. A broader survey of the euro zone showed both services and manufacturing contracting in May. Meanwhile, in the U.S., the Institute of Supply Management’s non-manufacturing index is forecast to remain unchanged, reinforcing fears that the world’s biggest economy is beginning to stall.
G-7 finance ministers and central bank chiefs are scheduled to hold a conference call today to discuss the worsening crisis in Europe. With the picture seeming to get worse each day, and with economic growth in both China and the U.S. now slowing, many investors and traders are speculating that central banks in North America and Europe could be forced to begin another round of quantitative easing. That sentiment could end up lifting stocks, even in the face of worsening economic news.
China’s Hang Seng index up 0.4 per cent
Japan’s Nikkei 225 index up 1 per cent
London’s FTSE 100 down 1.1 per cent
France’s CAC 40 up 0.4 per cent
Germany’s DAX index down 0.8 per cent
Spain’s IBEX 35 index up 0.5 per cent
Oil down 25 cents (U.S.) to $83.73 a barrel
Gold up 0.7 per cent to $1,624.80 an ounce (August delivery)
Copper futures down 0.4 per cent to $3.294 (July delivery)
Canadian dollar down 0.2 per cent to 96 cents
10 a.m. The Institute of Supply Management’s non-manufacturing index is forecasted to remain unchanged at 53.5. Any reading above 50 indicates that the service sector is expanding.
Stocks to watch:
The largest Canadian companies reporting today are Nordion Inc. and Saputo Inc. after the market close. There are no major reporters in the U.S.