Tuesday, August 14, 2007

Pre Market Update

The markets across Asia and Europe are a mixed bag. The Shanghai Composite continues it amazing run to 5000. Central Banks continue to pump liquidity into the system.

The Producer Price Index PPI rose more than forecast by 0.6% in July though excluding food and fuel, the gain was only 0.1% versus a 0.2% consensus. The lower core will give the Fed an opportunity to lower rates in the future.

Walmart reports a jump in profit but cuts outlook causing a drop in shares in pre market trading.While I've never been a fan of WMT , the stock is safe bet during unstable times. Perhaps the elite of Wall Street will be forced to shop here as their incomes fall this year due to the financial crisis.

UBS reported a 79% increase in profits and warns about the second half of the year due to credit market turbulence. UBS appears to be doing a better job of containing subprime versus its US counterparts.Perhaps its that Swiss efficiency.

Futures are pointing to a slightly higher open on Wall Street. Lately, higher opens are to be sold and lower opens bought. There is a higher degree of tension among market paticipants and volatility levels are elevated. After a rather benign trading session yesterday, I expect more volatility the rest of the week especially in light of option expiration on Friday.

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