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Inflation, Retail, Subprime Numbers Help Futures Rally

Wednesday, 14 Nov 2007 | 9:10 AM ET

Here's what's going on this morning: futures rallying on economic and subprime news.

1) Economic news showed no inflation at the wholesale level and retail sales on the aggregate were a tad better than expected.

2) Two large financial companies made relatively positive comments concerning their subprime exposure this morning.

--HSBC Holdings was the latest to take a charge on losses in the U.S. mortgage market. Remember, their HSBC Finance Corp owns the Beneficial and HFC names. They reported a net loss of $1.1 billion, which includes $3.2 billion in provisions for credit losses. Still, this is better than many had feared.

--Bear Stearns CFO, speaking at an industry conference,said the firm would take a $1.2 billion write-down for CDOs, less than many had feared. More importantly, their CDO exposure was cut more than in half, from $2 b at the end of August to $884 m today. He sees opportunities for buying and trading distressed mortgages. Up 7% pre-open.

Elsewhere:

--Macy's earning beat expectations, but more importantly their guidance for the fourth quarter ($1.70-$1.80) is well within analyst's consensus expectations of $1.74.

--Och Ziff IPO at NYSE. Daniel Och, who founded the highly regarded Och Ziff Management Group in 1994, one of the largest hedege funds in the world with over $30 billion in assets, will ring the opening bell. They priced their IPO last night: 36 million shares at $32 (price talk was $30-$33). Symbol OZM.


Questions? Comments? tradertalk@cnbc.com

  Price   Change %Change
HSBA
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M
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OZM
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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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