U.S. stock futures pointing to further losses (Marketwatch)
It's getting easier and easier to make an accurate call on the market these days: all you have to do is say, "major indices will be down between 5% and 10%." With seven straight downward sessions, we're still in the death spiral this morning. Futures for the S&P, Dow, and the Nasdaq are all off between 2.2% and 3.5%. If things get any worse, we're on track for the worst trading year since 1937. Any guesses for how low we go before we hit a rebound?
Bush to make statement Friday after market volatility (Reuters)
The President will be speaking at around 10 am from the Rose Garden of the White House this morning "to assure Americans that every action is being taken to stabilize the financial system," according to Reuters. Hopefully that "every action" point includes an end to lengthy congressional debates over policy that needs rapid-fire approval.
Asian Stocks Plunge as Credit Crisis Deepens; Banks, BHP Slump (Bloomberg)
Japan ended the day 9.6% lower, Hong Kong plunged 9%, India lost 8.9%, and Australia dropped 8.3%. Curiously, considering it has just introduced short-selling, China's Shanghai composite fell just 3.6%, although that index is off 67% from its high.
European shares plunge in early trading (Marketwatch)
The selling activity extends to Europe, too. Markets in England, France and Germany were all falling more than 8% in morning trading. "Panic" seems to be the watchword right now, as no one wants to call a bottom here.
Treasury Weighs Next Step to Stem Crisis (WSJ)
Meanwhile, Treasury big-wigs are trying to figure out what to do here. They're mulling several versions of the same capital-infusion scheme, according to the Journal. One would have Treasury take equity stakes in banks at favorable valuations; another would be voluntary, a la the U.K.'s plan. The most interesting suggestion seems to be the one where banks get federal funding if they raise a certain amount of money privately. That would carry fair risk, but it might also kick-start the market engine into gear again.
Oil down four dollars amid equities 'bloodbath' (AFP)
Oil fell to around $82 in Asian trading. At one point the price briefly tinkered in the 70's for the first time in about a year. As I said yesterday, the moves have been much larger on the way down than on the way up (equity market conditions notwithstanding). With stock prices back at 2002 levels, it's probably not unreasonable to look for $45 a barrel if things don't improve quickly.
Japan's Yamato Life fails with $2.7 bln in debt (Reuters)
Japan's first financial institution failed today: a mid-size life insurer that was a "one off" according to economics minister Kaoru Yosano. Still, Yamato is the largest insurance bankruptcy since 2001. Yamato was heavily loaded up on hedge funds, REITs, derivatives ... the whole pile. Actually, what this does highlight is how robust Japan's banking sector is. After a huge selloff, the Japanese are some of the only ones in the game actively looking to buy here.
GE 3rd-Quarter Profit Falls 12% as Markets Roil Finance Units (Bloomberg)
GE results don't look good, with revenue up but earnings down for the third straight quarter. Still, the company made $4.48 billion, or 45 cents a share, last quarter, which is exactly in line with the street's expectations.
GM, Ford Shares Fall on Cash Concerns (WSJ)
Things are ugly everywhere, but they're especially ugly in the automotive sector right now. GM and Ford are both on Standard & Poor's "credit watch"; GM shares plummeted 31% Thursday, while Ford tumbled 21%. There's also talk that Toyota might extend a zero percent loan offer on its entire lineup to keep sales flat in 2009.
Chevron sees 3rd-qtr results surpassing 2nd (AP via Forbes.com)
At least some companies are still raking in gobbles of cash. After making $5.98 billion in the April to June period, Chevron says it expects to top that in the third quarter!
Yen Cuts Fear-Induced Gains in Volatile Trade (CNBC.com)
The dollar fell through the 100 yen mark today, settling at around 99 yen vs. dollar. That's really troublesome for stocks in Asia, particularly the Japanese exporters, and it will probably encourage the Bank of Japan to cut 25 bps next week. Incidentally, the higher yen also makes Mitsubishi's already higher-than-market offer for Morgan Stanley even more expensive. Not promising.
IMF Speeds Access to Emergency Funds as Emerging Markets Buckle (Bloomberg)
Since things are so bad at home, there has been a tendency to think that all is OK in emerging markets right now. It's not: in fact, with spiraling oil prices (a major funding source), and a freezing up of credit, emerging markets will probably end up the biggest casualty of all in this crisis. Brazil, Mexico, and Peru are selling dollars to stay afloat (although Mexico looks one of the few emerging markets in reasonable shape). The IMF is loaning multi-billions.
Citigroup Ends Bid To Buy Wachovia (Washington Post)
The consensus on the street seems to be that Citi's bluff may well pay off: namely, that there is no way Wells Fargo is going to go ahead with a $15 billion acquisition when it comes with a $60 billion lawsuit hanging round its neck.
Cramer: Focus on the Time Frame (TheStreet.com)
Boooyah! You have to hand it to Cramer: his 7,500 call for the Dow doesn't look crazy right now. In fact, you could say that he's the only guy who got it right on Monday. "There's a general perception that I said fire in a crowded room," says the Mad Money host. "Here's what I did: I said, there's a chance you won't make incremental money in the stock market."