Day Traders Diary


U.S. futures and global equity markets are sharply higher after major central bank liquidity actions were announced this morning. The biggest of these was the coordinated coordinated action between the Fed and five other central banks to address pressures in global money markets (see 8:01 comment for details). These major central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points to ease strains in financial markets and mitigate the effects of such strains on the supply of credit. Prior to this coordinated action, futures had seen moved up after China eased policy by lowering its Reserve Requirement Ratio by 50 bps to 21.00%. S&P futures are now +27 pts and DJ futures are +235. U.S. futures were slightly negative prior to the China news, and global markets had sold off overnight, following S&P's downgrade of several major banks after the close yesterday and rumors of a weaker than expected PMI reading in China.

In Asia, markets saw large declines overnight, with China's Shanghai Comp falling 3.3%, closing before the reserve requirement cut was announced. The weakness may have been related to rumors that Thursday's PMI figure could be weaker than expected. Hong Kong's Hang Seng was -1.5% and Japan's Nikkei was -0.5%.

European markets have rallied sharply on the coordinated central bank action, after rebounding earlier on China's reserve requirement cut. Major European markets are now trading just off session highs (DAX +3.9%, CAC +3.3%). Eurozone Unemployment Rate hit a EU-era high at 10.3%. Germany, however, saw a decline in the jobless rate, which provided an up tick to markets, perhaps reaffirming the stability of the nation with the EU on its back.

U.S. corporate news is relatively light. OVTI is -12.0% after reporting better than expected earnings, but issuing downside Q3 guidance. YHOO is higher by 2% on reports that private equity firm Silver Lake offered to purchase a minority stake in YHOO for $16.60/share.

The econ calendar picks up today with the first of the week's employment data. The Nov. ADP employment report was just released better than expected (+206K vs +125K consensus), and will set the stage for Friday's govt Employment Report. In addition to ADP, Q3 Productivity and Unit Labor Cost data is due at 8:30 ET this morning, followed by Chicago PMI at 9:45 and Pending Home Sales data at 10:00. This afternoon, the Beige Book is due at 2:00 ET. After the close today, 13 cos are scheduled to report earnings, including ARO, GES, KKD, SIGM and LZB. Also, as a reminder, retailers will report their November Same Store Sales results tomorrow, which will act as an early gauge on the holiday shopping season.

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