Minyanville's Before The Bell: Investors Gain Confidence, Futures Up
Central banks continue to add funds to the markets and investors gain confidence causing futures to be up.
Asian markets continued their rally. Australia's ASX 200 rose 2.6%, Korea's Kospi rose 2.3%, Japan's Nikkei rose 2.6%, Hong Kong's Hang Seng finished up 2.8% and the Shanghai Composite crossed the 5000 mark to finish up 1.1%.
The Bank of Japan kept its overnight loan rate unchanged at 50 basis points. BOJ Governor Fukui added warnings of more painful market adjustments to come and said keeping interest rates too low was likely to spur excessive risk-taking signaling the BOJ would likely raise rates in October.
In a sign the credit crunch is still continuing, New Zealand's central bank said it will accept bank bills as collateral in its overnight repurchase facility. The ECB also continued to add liquidity to the markets, this time with a 40 bln euro injection of three-month funds. The offering was met with strong demand as 146 banks made bids. Please read Toddo's The Credit Card for the larger implications of the moves by the central around the world.
European markets are holding up strong. As of 7:30 AM EST, the CAC is up +0.96%, DAX up +0.96% as well, and the FTSE is up +0.94%.
The price action around the globe shows investors may be gaining more confidence in the credit markets. Adding to the sentiment was news that came out late yesterday that Bank of America (BAC) made a $2 bln investment in Countrywide Financial (CFC).
Goldman Sachs (GS) is also giving investors confidence as Bloomberg reports its Global Equity Opportunities Fund rose 12%. The fund made headlines weeks ago getting a $3bln injection after losing almost 30%.
Kohlberg Kravis Roberts said that it is continuing with its $1.25 bln IPO despite current market turmoil. For more company-specific ideas, please click on our Stocks to Watch
It is another light day on the radar. At 8:30 AM EST, Initial Claims data is set to be released. Please click here for the rest of the Trading Radar. In addition, as the market is still volatile, don't be fooled. Have a look at Professor Katsenelson's Navigating This Tricky Market and Professor Tatro's When Is It Time To Jump Ship?
Good Luck Minyans! Keep checking back with us on our News and Views page for continuously updated information you need to know!
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