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Minyanville's Before The Bell: ECB, BOE, Initial Claims, Lots To Digest; Futures Slightly Up


Markets were watching the ECB and BOE. Initial Claims came in slightly higher. Futures are edge up.

Topping The Headlines

The global markets were concerned with central bank actions in Europe this morning. The Bank of England held its benchmark interest rate steady at 5.75% and the European Central Bank followed holding their rate steady at 4.00%. S&P and Nasdaq futures are slightly positive but still keep an eye on DYA and SPY symbols as well as the dollar index, DXY when the markets officially open. Also read Minyan Peter's article for his informative piece on Why Europe Matters More.

The purge of subprime continues in the financials as Merrill Lynch (MER) fired a number of executives for its subprime exposure. Merrill's is also expected to announce write-downs of over $4 bln, potentially erasing most or all of the firm's quarterly profit. (From WSJ) The news may be overwhelming to MER as we currently see a slightly lower bid. Yet, the trend this week has been positive for financials disclosing large write-downs (UBS, C, and DB). Continue to monitor the levels of XBD and BKX as Toddo mentioned in his Random Thoughts yesterday, and make sure you read Minyan Peter's A Look Inside Citigroup's Writedowns for more background into the financials.

In a double blow against the dollar,Vietnam is planning to cut its purchases of U.S. Treasuries and other dollar denominated U.S. bonds while Qatar said it will cut dollar holdings of its $50 bln sovereign wealth fund. (From FT). In addition to monitoring the dollar index (DXY), look for treasuries to make a move. Keep an eye on the symbols TNX-E (Ten Year T Note), and the FVX-E (Five Year T-Note). For individual stocks, commodity-based equities could benefit (FCX, PCU, HL). For more company-specific ideas, click here for Minyanville's Stocks To Watch.

A Quick Check Around The World

Hong Kong's Hang Seng Index declined for the second straight day falling -1.8%. The drop marks the largest two-day decline in almost 2 months. Look to China Mobile (CHL) to be weaker in the U.S. as it led the decline in Hong Kong. The rest of the Asian markets were slightly weaker, and Shanghai was closed. Read Professor Depew's Five Things You Need To Know from yesterday for a humorous, yet informative look into the Asian markets.

A Look In Commodities

Crude Oil is extending its declines falling -$0.41 to $79.53. Metals are weak as gold is lower, down by -$4.80 to $730.90. Copper and Silver are also down by approximately 1% each. Look for the ETF's to open weaker in the metals (GLD, GDX, SLV) as well as the oil ETF's (USO and OIH). Get Professor Lewis' views in his article What Will Gold Do Next?

What To Expect Today

Initial Claims figures came slightly higher than expected at 317 k versus 310 k cons. Factory Orders will be released at 10:00 AM. Continue to monitor the stocks with excellent global exposure. Boeing (BA) and Dryships (DRYS) come to mind. If the data also comes in lower and you believe it confirms a trend in the slowing U.S. economy, look to safe-havens in the biotech sector. Professor Miller suggested on the buzz two great diversified plays in the Nasdaq Biotech Index (NBI) and AMEX Biotech Index (BTK). Also have a look at Professor Fleckenstein's latest Snazzy Nastech A Fashionable Investment.

Keep checking back with us for continuously-updated information you need to know. Consider partying with us tonight if you're in the NYC area for our monthly Rolling Bones session at the Red Lion. Have a great day, Minyans!
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