Volatility is picking up across global financial markets, which sets the table for early weakness on Wall Street Wednesday. Forty-five minutes before the opening bell, stock index futures hint at a possible 50 point early loss for the Dow Jones Industrial Average.

Shares traded lower across Asia on concerns China will continue to tighten monetary policy. The Shanghai Composite Index lost 2.9 percent and Shenzhen Composite Index tumbled 3.7 percent. Hong Kong’s Hang Seng lost 1 percent and Japan’s Nikkei finished down 1.8 percent. UK’s FTSE is down .6 percent and pacing a decline across Europe.

In the US, the day’s economic data showed Housing starts falling to an annualized rate of 557,000 in December, down from 580,000 the month before and well below economist estimates of 572,000. However, building permits, a better gauge of future activity, jumped to 653,000, from 589,000 and better than economist forecasts of 572,000.

Separate data, from the Labor Department, showed the Producer Price Index up .2 percent in December. Economists were expecting no change in the PPI.

Bonds are a bit higher on the global equity market weakness and poor housing data. Bonds are also benefiting from news Republicans gained a Senate seat with the Scott Brown victory in Massachusetts last night, which could potentially derail Obama’s healthcare reform plans. The benchmark ten-year Treasury bond is up 5/32nd and now yields 3.67 percent.

The dollar slipped .15 to 90.96 against the Japanese yen. The euro is taking another beating, falling another .0151 to 1.4140 against the buck.

Energy, miners, and metal stocks are likely to open lower after crude oil lost $1.33 to 477.69 a barrel. Gold gave up $14 to $1126 an ounce.

HMO and healthcare names, which led the markets higher Tuesday, will be watched after the Brown victory in Massachusetts.


Meanwhile, Bank of America (BAC) is off .5 percent after posting a 60 cent per share quarterly loss, which was 7 cents worse than expected. The bank’s new CEO Brian Moynihan also noted in the earnings announcement that, “economic conditions remain fragile.”

IBM is off 1.9 percent even after reporting much better than expected earnings and revenues. However, Rambus (RMBS) is rallying on news of a legal settlement with Samsung. Cree Research (CREE) is up on earnings news. Finally, Ebay (EBAY), Seagate (STX), and Starbuck’s (SBUX) might see action today ahead of earnings, due out after the closing bell.