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Minyanville's Before The Bell: Fresh Scares In Europe, Futures Pointing Lower


Northern Rock is scaring investors. Bulls are hoping for good economic data to save the day!

Stock futures are pointing lower this morning amid fresh liquidity concerns overseas. As of 7:25 AM EST, S&P futures are trading -8.7 points to 1489, and Nasdaq futures are trading -18 points to 2006.

In Asia, Japan's Nikkei 225 gained 1.94% as the yen sold off against all 16 of the most active currencies prompting investors to get back into the yen carry trade. As of this morning, the Yen was trading 115.20 to the dollar and 159.48 vs. the euro. (From Bloomberg) Read Professors Bloudek's The Duration Carry Trader for an understanding of this important relationship.

In China, the Shanghai Composite added 0.73%. In continued efforts to cool the overheating economy, the central bank raised its benchmark lending a fifth time since March to 7.29% from 7.02%. The increase will take effect tomorrow. Investors will have to wait until Monday to see how the market will react as the news was released after the market close. Please read Toddo's Chinese Food For Thought for more of an understanding of this major economy.

In other parts, the Hang Seng gained +1.47%, Taiwan's TAIEX gained +1.17%, and India's SENSEX lost -0.07%.

Markets in Europe are trading lower. The CAC is down -1.24%, the DAX is down -1.10%, and the FTSE is down -2.06%.

Making headlines in Europe, Northern Rock injected fresh new fears into the marketplace as the U.K.'s third largest lender by gross mortgages stated it will receive emergency funding from the Bank of England. Northern Rock shares plunged 26% on the news falling to a six-year low. (From Bloomberg) Please read Minyan Peter's Minyan Mailbag for his explanation of why Europe matters more.

In the U.S, the markets will be looking to today's economic data for any clues of the Fed's action as the Fed has insisted it is data-dependent. On the radar today we have the following:

8:30 Current Account: -$190 bln cons.
8:30 Import Prices:
8:30 Export Prices:
8:30 Retail Sales: 0.5% cons.
9:15 Industrial Production: 0.3% cons.
9:15 Capacity Utilization: 82.0% cons.
10:00 Michigan Sentiment-Prel: 83.5 cons.

General Motors (GM) may continue to make moves. The stock surged 10% yesterday as news was announced the United Auto Workers union was willing to create a union-controlled benefits trust. Late yesterday the UAW also announced it was making GM the lead negotiator on a new four-year contract. (From WSJ)

HSBC (HBC) raised eyebrows as the company's co-head of Global banking announced he would leave after 21 years. (From Bloomberg)

Please click on our Stocks to Watch for more company-specific news. In addition, please keep checking back to our News & Views section for continuously updated information you need to know.

It's Friday, Minyans! Workin' for the weekend! Good luck and good trading!
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No positions in stocks mentioned.

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