A sell off in global stock markets is depressing Wall Street ahead of the opening and setting the stage for what will likely be a choppy trading day. The Shanghai market was the worst hit, losing 9%, its steepest decline in 10 years. The weakness extended across Asian markets and European stocks are lower.
China's sell off was spurred by worries that policies could be introduced when China's National People's Congress meets next week that would curb speculation in the stock market. Major European indices were all more than a percent lower, with materials and banking shares hit by selling.
DATA Lots of economic news will help drive markets today, including existing home sales at 10 a.m. Durable goods and consumer confidence are also reported today. Oil is weaker this morning.
SUB PRIME -TOP OF MIND The Wall Street Journal's Heard on the Street column today looks at the sub prime mortgage market, saying the worst may be yet to come for mortgage lenders. Accompanying that story today was the Journal's equally glum look at bank reserves. The newspaper reported the reserves to cover bad loans are at the lowest level since 1990.
Our Steve Liesman will be reporting on sub prime today. We are also waiting to see what Fannie Mae will tell analysts on its investor conference call at 10 a.m.
"The sub prime thing is having a psychological effect only because everything's changing so quickly - the outlook for the economy, the GDP, Iran and the price of gasoline," says our Rick Santelli.
CHENEY TARGETED? As Vice President Dick Cheney visits Afghanistan, a suicide bomber killed and wounded two dozen people just outside the main US military base there. The Taliban claimed responsibility and said Cheney was the target. Cheney was unhurt and later met with President Karzai.
CORPORATE NEWS Toyota is driving into Tupelo, Miss. today, announcing that it will establish its eighth US plant there.