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Minyanville's Before The Bell: Credit Casualties Emerge, Futures Point Lower


Credit casualties emerge with UBS, Citigroup, and Netbank. Stock futures point lower.

Stock futures are down slightly this morning. As of 8:00 AM EST, S&P futures are trading -0.10 points to 1538, and Nasdaq Futures are trading -1.5 points to 2112.

In Asia, Japan's Nikkei edged up +0.36% as confidence among large manufacturers in Japan holds near a two-year high. The Bank of Japan's quarterly Tankan index of manufacturer sentiment came in at 23 points from June through September. The consensus estimate called for a decline to 21 points. (From Bloomberg)

India's Sensex gained +0.22%, yet banking stocks fell after a report showed a growth in the money supply, reducing the chances that the central bank will cut interest rates. Taiwan's TAIEX gained +0.13%. Markets in China and Hong Kong were closed.

Over in Europe markets are mixed. The CAC is down by -0.27%, the DAX is up slightly by +0.01%, and the FTSE is lower by -0.05%.

Topping headlines in Europe, UBS(UBS), Europe's third largest bank, is expected to write down as much as $3.41 bln this quarter. The write-downs of fixed-income securities and 1,500 job cuts make UBS one of the highest-profile victims due to the recent turmoil in the global credit markets. (From Bloomberg) UBS is down this morning in overseas trading. For more insight, please read an exchange between Toddo and Minyan Peter in How European Banks Affect The U.S.

In European economic data, U.K. mortgage lending fell to an 18-month low in August rising just GBP 8.5 bln versus an increase of GBP 8.9 bln in July. Also, Total consumer lending growth slowed to GBP 9.5 bln versus GBP 9.9 bln cons.

Crude oil is trading lower -$0.21 to $81.45 and Gold is higher by +$1.80 to $751.80.

Here in the U.S. Citigroup (C) and NetBank (NTBK) are adding to the worries in the financial sector. Citigroup released a statement saying it expects 3Q net income to drop 60% due to credit market deterioration. In addition, NetBank, the internet-only savings and loan company, announced it was being taken over by federal regulators in the largest bank failure in over a decade. The company's problems worsened due to recent credit market turmoil. (From WSJ) For more on current credit market conditions, please read Professor Shedlock's Global Credit Crisis Weekly Wrap-Up.

In a bit of M&A news this morning, Nokia (NOK) is in talks to buy software maker Navteq (NVT), a leader in electronic mapping for in-vehicle navigation, and mobile phone applications. (From WSJ) Professor Katz first mentioned his bullish idea on Nokia back in late August in Breaking Down The Tech Sector.

For more company-specific news, please click on Minyanville's Stock's To Watch.

On the radar this morning, the ISM Index is set for an 10:00 AM EST release. Auto and Truck sales figures will be released late this afternoon at 5:00 PM EST. Click here to see the full trading radar. Also get caught up with last week's events with Professor Tuttle's Week In Review.

It's Monday and we have a busy week ahead. Keep checking back with us for continuous information you need to know. Good luck!
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