Exchange traded funds tracking global stocks and precious metals were set for steep losses Monday on news the congressional “supercommittee” charged with cutting the U.S. deficit will announce it can’t reach a deal.
SPDR S&P 500 ETF (NYSEArca: SPY) was off 1.7% in premarket trading. Dow futures were down about 170 points before the bell.
Gold and silver ETFs were also poised to open the week in the red. SPDR Gold Shares (NYSEArca: GLD) fell 1.2% in preopen action, while iShares Silver Trust (NYSEArca: SLV) shed about 4%.
The 12-member bipartisan supercommittee likely will announce Monday that it has failed to reach an agreement, putting the U.S. on the path to $1.2 trillion in automatic spending cuts, Bloomberg reported.
“Lawmakers likely will not return to the problem until 2013 at the earliest as they shift their attention to the 2012 presidential and congressional elections,” Reuters reported.