Minyanville's Before The Bell: Greenspan & Goldman Take out Bulls This Morning, Futures Point Lower
Alan Greenspan and Goldman Sachs both issued negative statements on the economy taking out the bulls this morning.
Asian markets closed mostly higher. China's Shanghai Composite ended very strong last night gaining +2.64% even as the central bank stated it would maintain a "moderately tight" monetary policy to fight inflation and cool down the economy. The central bank also added that China needs to continue to monitor the effects caused by subprime problems in the U.S. (From Bloomberg)
Elsewhere, India's SENSEX gained +0.82%, and Hong Kong's Hang Seng added +0.29%. Losing on the day were Taiwan's TAIEX and Japan's Nikkei both by -0.02%.
Markets are lower in Europe. The CAC is down -0.40%, the DAX is down by -0.19%, and the FTSE is down by -0.76%.
Topping the headlines in the UK, Alan Greenspan was in the news stating the economy of the UK was doing exceptionally well although the risk of recession has risen. The statement coincides with a report by Goldman Sachs (GS) that the firm has reversed its outlook on the world economy warning that weakness stemming from the U.S. subprime crisis could hit Japan and Europe. (From BTIG) Read an exchange between Toddo and Minyan Peter in How European Banks Affect The U.S for more insight into the global economy.
Also contributing to the downside pressure is news of Northern Rock borrowing more money from the Bank of England on its emergency line. Theses actions have increased concern for investors on Northern Rock's viability. (From FT) Read Toddo's Random Thoughts from yesterday as he talks about other recent moves by foreign central banks.
In European economic data, EU September confidence came in at -5 versus forecasts of -4. Industrial confidence was less than expected at a figure of 3 versus 4 cons, and economic confidence came in at 107.1 versus 109 cons.
Here in the U.S, Greenspan also mentioned his thoughts on the U.S. economy. Risks of a recession have risen although he believes the figure is less than 50%. Greenspan recommended that the economy improve flexibility in order to avoid downside shocks. (From BTIG)
Further, a report by Dealogic stated M&A activity dropped over 42% in 3Q. The figure dropped to $1,000 bln compared to $1,740 bln announced in the previous quarter. (From FT)
Speaking of M&A, Google (GOOG) is under criticism from lawmakers over its proposed $3.1 bln acquisition of internet advertising broker DoubleClick. Lawmakers have expressed their antitrust concerns as well as privacy issues with the company. (From WSJ)
Also, 3Com (COMS) announced a sale of itself to Bain Capital and Huawei Technologies for more than $2 bln. The deal values 3Com at more than $5 a share, representing roughly a 50% premium to its closing price yesterday (From WSJ)
For more company-specific news, click here for Minyanville's Stocks to Watch.
Crude is trading -$0.34 to $82.54 while Gold is higher by $4.60 to $744.50
Investors have a plethora of economic data to digest this morning. See below for the list of events for today and click here for the full trading radar.
8:30 Personal Income: 0.4% cons
8:30 Personal Spending: 0.4% cons
8:30 Core PCE Inflation: 0.2% cons
9:45 Chicago PMI: 53.5 cons
10:00 Construction Spending: -0.1%
10:00 Michigan Sentiment-Rev: 84.0
As we head to a critical point in Finance, it is important to consider all variables to make an informed decision. Get these views in Toddo's Minyan Mailbag: Seeing All Sides of the Market. Alright, Minyans! TGI Friday! Good luck and good trading!
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