Jill Schlesinger: Tuesday Market Note

The U.S. stock market is set to open lower this morning as economic slowdown fears continue to outweigh the recent rash of merger activity.

Asian and European markets were down, following a disappointing session in the U.S. Japan's Nikkei average touched a 15-month closing low of 8995, below the psychological 9,000 threshold, and has technically qualified as a bear market, having fallen more than 20 percent from its high point in April.

The Japanese yen hits its highest level against the U.S. dollar in 15 years, a trend that negatively affects exporters and could potentially stymie Japan's economic recovery.

Yesterday, the Dow Jones Industrial Average was down 39 to 10,174, after being up more than ninety points earlier in the session. The NASDAQ dropped .9 percent to 2159 and the S&P 500 was off 0.4 percent to 1067, a five-week low.

Investors are waiting for this week's data before making firm commitments. Today, existing home sales are due at 10 a.m. ET. If the consensus estimate of 4.65 million homes is correct, it would be the weakest reading since March 2009, when 4.61 million existing homes were sold.

That would mean that despite multi-decade low mortgage rates, the housing market will essentially be at the same level that was seen at the crisis low.

In other words, the government's homebuyer tax credit simply delayed the painful process of clearing out excess inventory that occurs after every boom and bust.