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Minyanville's Before The Bell: Investors Feel Good About Europe, Futures Point Up


Investors may be happier that no one bid for the Bank Of England's emergency funds. Futures are pointing higher.

Stock futures are up this morning as markets are mixed around the world. As of 7:15 AM EST S&P Futures are trading +6.7 points to 1535, and Nasdaq futures are up by 12.5 points to 2110.

Asian markets were mixed. Japan's Nikkei added +0.21%, China's Shanghai Composite lost -1.61%. The decline marked the second consecutive loss led by property stocks as the official media announced that the People's Bank of China may increase mortgage rates to 1.1 times its benchmark one-year lending rate, currently at 7.29%. (From Bloomberg)

In other parts, Taiwan's TAIEX gained 1.67%, and India's Sensex crossed 17000 for the first time before ending slightly lower with a +0.13% gain. Other markets were closed for various holidays.

Markets in Europe are trading higher. The CAC is up by +0.74%, DAX is up by +0.31%, and the FTSE is up by +0.78%.

Economic data helped boost the sentiment. Second Quarter GDP for the United Kingdom came in at 0.8% inline with expectations. The figure puts the annualized rate at 3.1% ahead of forecasts of 3%.

The Bank of England announced it will reduce supply of credit to companies significantly in the fourth quarter. The intention is to tighten loan conditions and respond to higher market borrowing costs. The central bank cited a survey of lenders that showed 49.3% expected to the bank to cut credit supply compared with 20.2% the previous quarter. (From Bloomberg)

In related news, Bloomberg reports that there were no bids in the Bank of England's money-market auction. No financial institutions made a bid on the $20 bln that the central bank made available signaling the worst of the credit crisis is over. Get Toddo's thoughts of moves by foreign central banks. Click here for his new article, Russian Roulette!

In the U.S, General Motors (GM) and the United Auto Workers union said they have reached a tentative agreement to end the strike. The agreement announced this morning at 4 AM in Detroit calls for a historic restructuring of GM's obligations for UAW retiree health care. (From Bloomberg) Professor Depew gave his thoughts on the GM/UAW strike. Please read his Five Things You Need To Know from yesterday.

Microsoft (MSFT) is also in the news this morning. The company's CEO Steve Ballmer said it is adopting a new strategy in hiring outside talent to compete with rivals . Professor Macke offered his thoughts that the company was making all the right moves. Read his quick article from yesterday, Bringing It Home.

For more company-specific ideas, please click on our Stocks To Watch.

On today's radar investors will be closely watching durable goods data which is set to be released. Economists are expecting a decrease of about 2.5%. Traders will also be watching the weekly crude inventories report as crude oil continues to hover around the $80 mark. The release is set for 10:30 AM EST. Please click here for the full trading radar.

Minyans! Hope you're having a great morning and check out Hoofy and Boo's new video. Good luck and good trading!
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No positions in stocks mentioned.

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