Dow Index Set for Longest Losing Streak of 2019; ECB Rate Decision in Focus
New York (Mar 7) Wall Street looks set to extend its three-day losing streak Thursday, the longest of the year, as investors await a key interest rate decision from the European Central Bank and fret over the fate of the global economy amid a lull in progress in U.S.-China trade talks.
The ECB is expected to keep its key policy rates on hold today in Frankfurt, including the negative charge it applies to overnight deposits at the bank, but will likely unveil a fresh lending program for the region's lenders aimed at stoking new credit growth in the flat-lining bloc.
The move, which may also come with downgrades to the ECB's growth and inflation forecasts, also likely means President Mario Draghi will serve out his seven year term, which ends in November, without ever having raised interest rates in the world's biggest economic bloc, underscoring its inability to sustain consistent growth since the 2012 debt crisis.
With that in the background, and the U.S. corporate earnings session gliding towards a close, investors have felt more comfortable in defensive positions of late, opting to take profits from a market that's had it best start to any year since 1991.
Contracts tied to the Dow Jones Industrial Average are indicating a 90 point decline for the benchmark at the start of trading today, extending its decline into a fourth consecutive session, while those linked to the S&P 500 suggest a 7-point pullback for the broader benchmark.
European stocks were also on the back foot heading into the ECB rate decision, with the Stoxx 600 drifting 0.47% lower by mid-day as government bond yields around the region rallied, taking benchmark 10-year German bunds to just 0.12%.
Global oil prices, however, bucked the defensive trend and rose sharply in early Thursday trading as investors shrugged off a bigger-than-expected build-up in domestic crude supplies, which hit a December 2017 high last week, and focused on the impact of U.S. sanctions on the sale of oil from Venezuela and ongoing production cuts from OPEC and its non-member allies.
Brent crude contracts for May delivery, the global benchmark, were marked 81 cents higher from their Wednesday close and changing hands at $66.8 per barrel while WTI contracts for April were seen 58 cents higher at $56.80 per barrel.
TheStreet
