The bull market in stocks that started on election night in November 2016 has been looking tired for a while. ‎Friday's troubling trading and today's follow through suggests that a correction could be starting.

Friday was the best and worst of times for US stocks. While the Dow hit an all-time high, the NASDAQ sold off finishing down 1.8% on the day. At first it seemed like this was profit-taking ahead of a summer weekend with traders starting off with their biggest winners, big tech stocks.

Overnight trading, however, indicates that the NASDAQ drop was not isolated and that a much bigger correction. Failing to respond positively to a big win by Macron's EN Marche! Party in French parliamentary elections, and a poor performance by Italy's Euroskeptic Five Star movement in local elections, European indices are in retreat today. The Dax, CAC and IBEX are all down over 1.0% today, along with the Hang Seng. The FTSE and Nikkei are down about 0.5%.

To make matters worse, NASDAQ futures show that market continuing to drop, falling 0.75% outpacing 0.25% declines to Dow and SPX futures. It's possible the damage may have been cushioned for the broader US indices and the FTSE by energy stocks with WTI and Brent crude oil up 1.3% to start the week. With Australia, another resource producing country one of the‎ few markets to finish up (slightly) overnight, Canadian resource stocks may attract attention today. 

In currency markets, EUR has been climbing relative to GBP after traders had a weekend to assess what the UK election results mean for their relative balance of power heading into upcoming Brexit talks. ‎USD is mixed relative to other majors as traders await Wednesday's FOMC interest rate decision and monetary policy outlook. 

Corporate news

There have been no major corporate developments this morning. 

Economic news

Significant announcements released overnight include:

Italy industrial production    1.0% vs street 2.5%

Upcoming significant economic announcements include:

There are no major announcements scheduled for North America today. 


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