CNBC's Domm: Today's Agenda in the Markets

Wall Street is set for a higher open after world stock markets rebounded in a Fed-inspired relief rally.

Tokyo stocks were up 3%, the biggest gain in more than a year, in its first trading day since the Fed move. Friday, the Nikkei had been down 5%. Hong Kong was up 4.1%, China's Shanghai composite rose 4.8%, and South Korea rose 5.4% and Taiwan rose 5.1%. European stock markets, up sharply Friday, continue to rise this morning. The U.K. FTSE-100 and French CAC-40 are up more than 1% each. The yen is weakening today against the euro and dollar for a second day.

Fed Right or Wrong?

How well is Fed Chairman Ben Bernanke dealing with his first real trial by fire? That is a hot topic of debate in the financial markets and in the weekend newspapers. We will look today at whether the Fed was late in discovering the impact of housing and the credit crunch on the economy, and if it stuck too long to its view that inflation was the biggest risk. When the Fed declared Friday it was cutting its discount rate for bank borrowing by half a point, it said it judges that "the downside risks to growth have increased appreciably."

"I would say the Fed missed it, along with everybody else, but I don't think it's right to say they admitted a mistake on Friday because I think what they would say is, "look the financial meltdown (in credit markets) on Thursday took us as much by surprise as other market participants and Thursday's meltdown was a game changer," said CNBC senior economic correspondent Steve Liesman.

Housing Hurt

Lowe's, the second biggest home improvement retailer, reported a better-than-expected 9% jump in net income in the second quarter. Profits were $1.02 billion, or $0.67 per share, compared to estimates of $0.61 per share. Lowe's, however, lowered its full-year outlook and said comparable sales in the third quarter would be flat. The company predicts total sales for the year will rise about 6%, but same store sales will fall by 2%. Rival Home Depot last week blamed its 15% drop in quarterly profits on housing-related weakness.

Lowe's CEO Robert Niblock said "macro economic factors, including the many aspects of the housing market continue to result in regionally disparate performance. Markets in California and Florida, generally considered most pressured by housing continue to perform significantly worse than average." He said the Northeast, while still producing negative comparable sales, is showing signs of improvement. Lowe's stock is moving up on the news ahead of the market open.

Oil Drill

Oil prices are lower as Hurricane Dean heads for Mexico's Yucatan Peninsula, appearing to steer clear of the important oil producing areas of the Gulf.

"We're only seeing (possible) losses out of the Mexican Sound of Campeche," said John Kilduff, MF Global senior vice president. Kilduff, a CNBC contributor, holds tight to his forecast that oil prices are heading higher. "I think they are going to hold and go higher. We were bouncing, arguably without the storm," he said. Kilduff also oil hit a double bottom in the short term chart at $70.10 per barrel. Oil was trading just above $71 per barrel.