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Friday, April 11, 2008

Six Stories That Will Move the Market Today

1) GE's poor outlook is weighing on stock futures -- at this point, Dow futures are down over 100 points.
General Electric Profit Declines 12% on Finance Unit; Annual Forecast Cut General Electric Co. said first- quarter profit fell 12 percent, missing analyst estimates, because it couldn't complete asset sales and had higher-than- expected losses at its finance businesses due to disruptions in global capital markets. GE cut its full-year forecast.

2) Boris Schlossberg writes about some of the whipsaw forces driving currencies ...

Most of the dollar crosses have started to consolidate ahead of the G-7 meetings as a number of initiates to restore stability to the financial system will be bantered about. Monetary leaders are expected to weigh a number of ideas to provide additional liquidity to the markets and create measures to prevent recent problems from repeating in the future. New BoJ governor Shirakawa is expected to steer the talks toward restoring the dollar’s strength, as his country has been negatively impacted by its recent depreciation. However, don’t expect the U.S. and European countries to support those efforts, as Kathy Lien wrote in Why G-7 meetings matter.

And yes, the G-7 is meeting.

3) The China problem isn't going away, and the surge in China's currency reserves could push the US government to further weaken the US dollar (in a misguided attempt to improve our trade balance with China)
China's Foreign-Currency Reserves Surge 40% to $1.68 Trillion on Inflows China's foreign-exchange reserves, the world's largest, surged to $1.68 trillion at the end of March, adding pressure on the government to prevent money inflows from fueling inflation already at an 11-year high.

4) The mortgage crisis continues to spread overseas.
S&P Cuts Rating on $4.6 Billion of Australian, New Zealand Mortgage Bonds Standard & Poor's lowered the credit ratings on about A$5 billion ($4.6 billion) of Australian and New Zealand residential mortgage-backed securities in the first cut to the nations' home loan bonds from the U.S. housing collapse.

5) Global inflation continues to worsen.
India to Scrap Export Incentives on Rice, Steel as Inflation Accelerates India scrapped export incentives for rice, steel and cement to boost local supplies and tame runaway inflation, which is damping consumer demand for manufactured products.

6) We are one bad harvest away from a global food crisis.
Philippines Seeks Wheat `All Over' After China Turns Down Export Request The Philippines said China turned down a request to supply wheat, adding to concern that the world faces a worsening shortage of staple foods that has already driven grain prices to records.

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