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Minyanville's Before The Bell: Global Markets lower, HD, Futures down

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Credit fears are back on top. Home Depot will take a cut. Futures are down.

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Credit fears are back on top pushing down global indexes and U.S. stock futures. As of 7:00 AM EST, S&P futures were down 2.50 points at , Nasdaq futures were down 6.2 points at 1933.

Asian indexes ended lower. Australia's ASX 200 ended down -1.16%, Japan's Nikei ended down -0.41%, the Hang Seng ended down -0.20%, and Korea's Kospi was down -0.47. The Shanghai composite continued its rally above the 5100 mark for a 1.49% gain and India's Sensex was another exception adding 1.84%.

Topping the headlines in Asia, the Bank of China surprised investors with a $9.7 bln exposure to U.S. subprime securities resulting in 6.4% slide in its stock. The previous consensus was that Asian banks did not have heavy subprime exposure. The drop was the largest for the company since going public last year. Get caught up on the subprime issues on our Subprime Slime page.

Markets in Europe are not performing as well either. The CAC is down -0.03%, the DAX is up 0.40% and the FTSE is down -0.03%.

News of Germany posting its first budget surplus in 20 years helped push up bullish sentiment. Yet current market issues continue to weigh on the minds of investors as Germany's Landesbank Sachsen rebuffed a report that it received approximately $88 bln in emergency funding. The bank stated the funding is less than 5% of that figure. (From Bloomberg) Please read Mr. Practical's More Bailouts Could Bring Disaster Down The Road for his warnings of the effects of intervention by the central banks.

In the U.S, investors were carefully watching Home Depot's (HD) sale of its wholesale supply unit. The sale announced in June was expected to close yesterday, but Lehman Brothers (LEH), Merrill Lynch (MER), and JPMorgan (JPM) threatened to back out citing the slump in HD's supply business. Sources close to the story said HD may be willing to accept a $1 bln price cut to salvage the deal.

Not helping the Bull case is a story in the Wall Street Journal that quant hedge funds have taken hard hits this summer especially in recent weeks. The losses were mostly blamed on too many funds following the same strategies. Toddo first warned about the problem of hedge funds in a circle shooting each other in his 2005 letter Keynote Address From Ojai.

Two bits of economic data is set to be released this morning. AT 8:30 AM EST, Durable orders will be released, and New Home Sales figures are scheduled at 10:30 AM EST.

Be sure to click on our Stocks to Watch for more company-specific ideas. Good luck and Good Trading, Minyans.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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