Germany's GDP Hits U.S. Stocks: Morning Call

U.S. markets are pointing towards a negative open with S&P 500 futures down 1% on reports that European growth slowed in the second quarter. Most concerning is the effect of the Euro debt crisis on growth in Germany -- Europe's largest economy essentially stalled, growing only 0.1% in the second quarter.

The disappointing economic data comes ahead of today's meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy to discuss the Eurozone debt crisis.

The Stoxx Europe 600 index fell in early trading, down over 1% as the cost to insure Eurozone debt increased for the first time in three days.

Commodities also fell on the weak Euro growth report with crude oil and copper both down over 1%, as investors see declining demand prospects. The SPDR Gold Trust ETF (GLD) will be in focus for active investors looking for protection after the weak Euro report and ahead of U.S. housing data.

Gold mining stocks have outperformed most stocks during the three week sell-off, but are still underperforming the SPDR Gold Trust ETF. Barrick Gold (ABX) and Randgold (GOLD) posted big gains yesterday, approaching breakout levels on the charts. Royal Gold (RGLD) and Yamana Gold (AUY) continue to base near highs and lead gold names higher, while Goldcorp (GG) and Coeur d'Alene Mines (CDE) remain below key moving averages.

Investors will be focused on retail earnings this morning as Urban Outfitters (URBN) is down 10% after reporting earnings results. Other retail names like Home Depot (HD), TJX (TJX) and Saks (SKS) all report earnings Tuesday before the open.

Goldman Sachs (GS), Caterpillar (CAT) and Exxon Mobil (XOM) continued to rebound from recent selling, while Apple (AAPL) paced markets.

Baidu (BIDU) saw tremendous selling, losing 3% on reports they may have allowed an illegal retail website to operate and steal customer data -- the stock is down 3% in pre-market trading.

Disclosure: Scott has no positions

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