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Minyanville's Before The Bell: Central Banks Pull Back, UBS Warns, Retailers Suffer


Central Banks, UBS warns, Wal-Mart warns? Take a look and prepare for the trading day!


Stock futures are edging up higher this morning. As of 8:00 AM EST, S&P futures are trading up 2.9 points at 1458, and Nasdaq futures are trading up 1.2 points at 1943.8.

Beginning in Asia, central banks of Japan and Australia drained cash from their banking systems this morning possibly signaling a return to normalcy in the region. The ECB; however, continued to add money into the markets, this time pumping in another $10.48 bln as overnight rates continued to hover above the ECB's 4% target.

Economic expansion in the EU expanded only 0.3%, coming in lower than expected due in part to major slowdowns in manufacturing and construction. Get the bigger picture of the effect of the central banks on our Economy page at our New & Views section.

Financials may go under another wave of selling pressure as shares of UBS hit its 52 week low overseas this morning after issuing a warning that current "turbulent" market conditions may reduce profit for the rest of the year.

Compounding the problem is a statement by Sanford Bernstein analysts Michael Howard and Howard Mason saying Citigroup (C) may have lost as much as $3 bln in 3Q because of current credit conditions and marking down loans15-20%. Professor Tatro provides his takes on the financials in To Buy Or Not To Buy The Banks.

In major earnings news, Home Depot (HD) reported 2Q $0.77 EPS vs. $0.72 cons. Revenues fell 1.8% y/y to $22.18 bln vs. $22.32 bln cons. The company expected housing and home improvement markets to remain soft into 2008.

Wal-Mart (WMT) also reported 2Q $0.72 EPS vs. $0.76 cons on revs of $91.99 bln vs. $92.42 bln. The company also issued downside guidance for FY08.

Please read Professor Limantour's Filling Your Cup With Water Plays and Professor Udall's Thoughts on the Tape: Sun Microsystems, Qualcomm, Apple for other stock-specific ideas. And as always take a look at our Stocks to Watch.

Below is important economic data to be released today:

  • 8:30 PPI: 0.1% cons
  • 8:30 Core PPI: 0.2% cons
  • 8:30 Trade Balance: -$61 bln

Click here for the full Trading Radar.

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No positions in stocks mentioned.

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