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Minyanville's Before The Bell: Futures Mixed, Fed Presidents To Speak


Markets around the world are mixed. Investors are cautious as Fed presidents speak around the country.

Futures are mixed one day after the U.S. jobs report. As of 7:20 AM EST, S&P Futures are trading -.60 points at 1459, and Nasdaq futures are trading +0.8 points at 1971.

Over in Asia, markets closed in mixed sessions. Japan's Nikkei was hit hard losing -2.22% as GDP data came in less than expected. Japan's economy contracted 1.2% in the last quarter ending June 30 coming in far below previous government expectations of a 0.5% gain. Investors now see a 0% chance the Japanese government will raise rates. (From WSJ)

Korea's Kospi and Australia's ASX 200 were hit hard as well falling -2.6% and -1.4% respectively. Taiwan's TAIEX managed to lose -0.89%, and India's Sensex gained +0.04%.

In China, the Shanghai Composite gained +1.48% as investments continue to flow into the country. A government-backed investment company from Dubai will invest $2.5 bln in China as well as India over the next two years. The Dubai Group has spent the last 3-4 years studying the regions and will focus on manufacturing, real estate, and finance. (From WSJ) In addition, Blackstone (BX) announced it purchased a $600 mln stake into a state-backed Chinese chemical producer, China National BlueStar Corp. The investment amounts to a 20% stake in the company. (From WSJ). Have a look at our China page for a great context into this continuously emerging market, Minyanville Style!

Markets in Europe are trading mixed as well. The CAC is down -0.09%, DAX is lower by -0.02%, and the FTSE is up by +0.04%.

European equity markets got a slight bounce after economic data was released earlier this morning. UK August PPI came in at +0.1% on a m/m basis and 2.5% from the last 12 months to August. U.S. futures also received a bit of a boost as this economic data was released at 4:30 AM EST. Please read Minyan Peter's Minyan Mailbag: Why Europe Matters More for additional analysis on the importance of this correlation.

Shares of banks in Europe were succumbing to the bearish sentiment. Barclays (BCS), U.K's third largest bank slipped 3% as a report from the Financial Times stated that banks globally were paying out an extra $300 mln due to interest rate charges from the credit squeeze. Please read Mr. Practical's latest, What Future Does the Credit Crunch Bring?

In the U.S. talk of helping the government sponsored entities is back on the table. Senator Chuck Schumer plans to introduce a bill to temporarily loosen growth constraints on Fannie Mae (FNM) and Freddie Mac (FRE). The bill would call for a raise in the portfolio caps by at least 10% for one year while requiring the two government sponsored entities to devote half of that increase in helping borrowers with high risk loans. (From WSJ)

In commodities news, gold continues to make headlines as gold futures hit above the $700 mark again last Friday. The precious metal has been a very talked-about commodity at the 'Ville. Get great insight into this hedge against inflation with Professor Shedlock's The Past, Present, and Future In Gold.

Also noteworthy, late Friday, Countrywide Financial (CFC) made headlines announcing job cuts of up to 20% within the next three months. The reduction will account for as much as 12,000 jobs as the company reduces costs in the face of continued weakness in the housing sector. (From WSJ) For more ideas, please look at Minyanville's Stocks To Watch.

On the radar today, Consumer Credit data will be released at 3:00 PM EST. Although the radar is light, investors will be carefully watching for statements by a number of Fed presidents speaking around the country: Janet Yellen of San Francisco, Richard Fisher of Dallas, Dennis Lockhart of Atlanta, and Frederic Mishkin will be speaking in New York. Note that Chairman Bernanke is set to speak in Berlin tomorrow as well. Click here for the full trading radar.

Hope y'all had a great weekend. Keep checking back to our News and Views for continuously updated information you need to know. Good luck and Good Trading!
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