Today’s Economic Shakers

US stocks set to open lower as equity futures point towards another down day…

Following Wall Street’s worst day in more than five months, the market looks to continue the downtrend based on early morning trading in stock futures indices.

On Tuesday, equities were hit hard as investors seemed to lose faith in the “Trump trade", which has driven the market up to record highs following November’s presidential election.

Led by a steep decline in the banking sector, which saw bank stocks plunge by nearly 3% on average, the Dow Jones Industrial Average tumbled 1.14%, ending a record-breaking run that saw the index stay above the 1% loss level for more than 3 months.

The other key indices followed suit, with the benchmark S&P 500 index shedding 1.24% and the Nadsaq Composite declining 1.83%.

On Wednesday morning before Wall Street’s opening bell, the bearish pattern continued in stock futures, as Dow futures contracts were down by 0.2% and those for the S&P 500 index was off by 0.1%, putting it on track for a fifth consecutive session of losses.

Up until Tuesday, the banking sector has been a key beneficiary of the bull run that has come in the wake of Trump’s election as investors have viewed the promised $1 billion increase in infrastructure spending, along with the expected tax breaks and regulatory relaxation, as components to drive the economy forward.

This morning in Asia Stock markets followed Wall Street’s downward path, closing sharply in the red.

Meanwhile, Europe’s equity benchmark, the Stoxx Europe 600 index, fell by 0.7% in early trading putting puts the regional index on track for a third consecutive day.

That drop was the most severe for the Stoxx 600 in the last 4 weeks.

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Sears files annual report, says it may be going out of business...

In its annual report filed on Tuesday, Sears said that it is possible that it would not have sufficient cash to continue operations as a “going concern.”

The retail giant, which has been in financial straights for several years, made the comments in the section of the report that is traditionally reserved for potential worst case scenarios, and was not intended to be taken as a sign that the company was throwing in the towel.

However, Sears did conclude that it could not offer any guarantees that it would be able to continue to raise enough cash to maintain its operations.

As retail sales for the historic company have seen a sharp decline since the Great Recession, Sears has been able to continue to operate by selling off some of its most valuable assets, including some of its prime real estate holdings.

More recently, the company has been forced to sell off some of its hallmark brands such as Craftsman and Kenmore.

Sears CEO, Eddie Lampert, a successful hedge fund manager, has also helped keep the company afloat over the last couple of years by providing a cash infusion to the company.

Back in December, the CEO offered a letter of credit for the company in the amount of $200 million to help assure that the flow of products supplied by vendors would continue uninterrupted.The company’s report did say that it expects the recent selling of assets will help it continue operations for the next 12 months.

However, the company did emphasize that it could not offer any guarantees that it could continue its business operations despite its efforts to acquire additional liquidity.