Minyanville's Before The Bell: Global Bulls Emerge From Around The World, Futures Up
Stocks surge around the world a day after the fed rate-cut. U.S. investors are receiving a bit of sobering news however.
Asian stocks surged in response to the Fed's actions last night. In Japan, the Nikkei 225 gained 3.67% with the Bank of Japan deciding to keep key overnight interest rates at 0.50%. BOJ Governor Toshihiko Fukui added that although he did not have a specific target, current interest rates were still too low. (From Reuters)
In other parts, Hong Kong's Hang Seng and India's Sensex index both hit record highs gaining 3.98% and 4.17% respectively. Taiwan's TAIEX gained +0.30%, and China's Shanghai Composite was the laggard losing -0.55%.
In Europe, equity markets are surging as well. The CAC is up +2.56%, the DAX is up +1.89%, and the FTSE is up +2.32%.
Topping the headlines in Europe, minutes of the September 5-6 meeting showed the Bank of England unanimously decided to keep interest rates at 5.75%. All members agreed that upside risks to inflation had receded due to the turmoil that has hit the markets in the past few months. (From Moneyweek). If you haven't had a chance, please take a look at Minyan Peter's Mailbag: Why Europe Matters More.
In addition, a week after BOE Governor Mervyn King stated he would not in essence bail out banks that erred on risky lending, the BOE made a dramatic change by stating it would accept mortgages as collateral for three months. Governor King added in defense that a failure to act "would lead to economic costs on a scale sufficient to ignore the moral hazard in the future." (From FT)
In the U.S, investors are receiving a bit of sobering news after the highs from the Fed rate-cut. Morgan Stanley (MS) reported 3Q results less than consensus estimates. Earnings per share came in at $1.44 (including contributions from the Discover Financial spin-off) vs. estimates of $1.54. Revenues came in at $7.96 bln vs. $8.23 bln consensus. Yesterday Lehman Brothers (LEH) started off the round reporting better than expected results. Professors in the 'Ville were a little skeptical however. Please read Professor Depew's Five Things You Need To Know and Mr. Practical's Bringing Lehman's Fuzzy 3Q Into Focus for more color. Also have a look at Professor Reeves new article How To Read An Earnings Report to brush up on your financial analysis skills.
Adding to the pressure in financials, hedge fund manager Absolute Capital Management has halted redemptions from eight funds with $2.1 bln of assets after co-founder Florian Homm suddenly quit. Investors attempted to withdraw more than $100 mln after Homm quit yesterday in a dispute over pay for the firm's fund managers. For more company-specific news, please click on our Stocks to Watch.
On today's radar we have the following data set to be released. Please click here for the full trading radar.
8:30 CPI: 0.0% cons
8:30 Core CPI: 0.2% cons
8:30 Housing Starts: 1360 k cons
8:30 Building Permits: 1350 k cons
10:30 Crude Inventories: -7011 k
Before: AIR, KMX, DBRN, GIS, MS, POSS, SMTS
After: APOG, CKR, CLC, CMTL, MLHR
Alright, Minyans! When you get a break, have a laugh with Hoofy and Boo's new video! Good luck and good trading!
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