Minyanville's Before The Bell: Asia Surges! Europe Gains, Futures Up
The markets in Asia rallied and the Yen had its biggest one day gain in almost a decade! Global bullish sentiment is in the air!
One business day after the Fed lowered the discount rate in the U.S, Asian stocks experienced the strongest gains in the region with the Shanghai Composite, Hang Seng, and Taiwan's TAIEX all adding over 5% in their equity markets. Australia's benchmark stock index, the ASX 200 rose 4.61%. The Nikkei was the "laggard" adding 3%. Japanese exporters who were hit the hardest last week due to the unwinding of the yen carry trade, surged. Toyota (TM) and Canon (CAJ) gained 6.1% and 8.3% respectively. One thing to note, even as the equity markets had such a strong rally, the Bank of Japan and the Reserve Bank of Australia both continued to add more liquidity into the money markets. The Bank of Japan added $8.67 bln in the short-term money market and the RBA added $2.68 bln. Get caught up with last week's action in Toddo's Redemption Songs, and Professor Depew's Five Things You Need To Know: Special "Whew" Edition!
The Yen weakened above the 115 level versus the dollar. It reached as low as 112 Friday morning making today's gain the largest since 1998. Please read Professor Bloudek's The Duration Carry Trader for the importance of the yen and its effects on the U.S. markets.
Over in Europe, stocks are in the green as well. As of 7:25 AM EST, the CAC is up 1.15%, DAX is up 0.49%, and the FTSE is up +0.85%. Financial stocks gained as a Lehman Brothers (LEH) analyst raised its recommendation on financials to "overweight" from "underweight" citing strong fundamentals in the corporate sector and that current valuation is "pricing in an overly pessimistic outlook." The markets, however, are a bit more cautious as the Bundesbank in Europe said the EU's central bank's monetary policy is still "expansively oriented" and inflation may exceed the bank's target of 2%.
Oil traded lower this morning by $0.65 at $71.33 at 7:23 AM EST as Hurricane Dean headed away from the Texas oil fields.
In some stock specific news, only a few weeks after stating it was hiring more loan officers from rivals, Countrywide (CFC) sent an email to employees Friday discussing layoffs made as part of its effort to weather the current credit crunch. (From WSJ)
HSBC (HBC) is in talks with Lone Star for a majority stake in Korea Exchange Bank to boost its presence in Korea.
Nasdaq (NDAQ) said it is reviewing options for its 31% stake in the London Stock Exchange (LSE), a potential signal that it could boost its bid for the Nordic OMX.
At 10:00 AM EST, Leading Indicators will be released with analysts estimating a 0.3% gain. We will get a sign of the consumer spending this week as many retailers are set to report earnings. Please click here for the full radar and also have a look at our Stocks to Watch for more company-specific ideas.
Good Luck Minyans! And Be sure to keep checking back to our News and Views page for continuously updated information you need to know!
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