Thursday, August 16, 2007

Morning Note...

Futures sharply lower this morning as overseas markets, particularly Asia, are much lower.  Japan -2%, HK -3.3%, Shanghai -2.2%, South Korea -7%, India -4.3%.  Somewhat circular, however, as many of these mkts were off due to our Wednesday performance…  Australian home loan group RHG AU (Ram Homes) also failed to roll over AU$5B in loans…  Plenty of chatter on the Carry trade again – reference the JPY, the NZD, and the TRYJPY for example.

So does the Fed cut?  The issue is, while the financial mkts are suffering, the economy itself seems to be hanging in.  Employment, production, and consumer spending are all up.  Citi is apparently calling for a rate cut today, but what the Fed does is anybody’s guess.

Housing data negative, however.  July housing starts dropped 6% to the lowest level since January 1997.  

Oil off $1.50 and is below $72/barrel.  10-year note yields 4.67%. 

Buckle up for another bumpy ride today.  Negative sentiment and emotion are dominant, and we could be in for an ugly day.   Also, it bears noting that the S&P is off more than 10% from its peak.  Officially sounds like a correction to me.  How much more downside from here??

Announced Deals:  FITB acq FCTR fot $1.09B ($31/share)

Rockbay News: WSJ article on AL remaining independent, DJO deal clears anti-trust, QI started outperform at CSFB, DBAB cautiously positive on CAO 2006 10Q filing, EU to rule on RBS bid for ABN Amro by Sept 19, MSDW positive on DAI GY pullback – thinks company would be buyers here, CITI cautious on CBRY LN – thinks demerger most likely with PE “paralyzed,” WSJ reports KFT seeking buyer for Post cereal biz

Vito’s Trivia:  What state boasts the most fast food restaurants?  

Yesterday’s Answer:   “Stat” is used in the ER because it means immediately.  And presumably has less syllables that saying “ASAP.”  From the latin “statim” for immediately.