Why Futures Are Down Today

Futures are down for several reasons:

1) Now we're really data dependent. Part of the problem with the market this morning is the realization that the economic data will have to be REALLY weak for the Fed to lower rates further.

2) Concerns with the financials after CIBC downgraded Citiand Bank of America . The comments on Citi goes to a core investor concern, the 5.2% dividend yield: "We believe over near term, C will need to raise over $30 billion in capital through either asset sales, a dividend cut, a capital raise, or combination thereof." Citi down nearly 5%; remember Morgan Stanley downgraded Citi yesterday.

3) Credit Suisse isthe latest big bank to take write-downs for losses on residential and commercial mortgages (and their derivatives, collateralized debt obligations or CDOs). They also took losses on leveraged loan commitments.

European banks are lower after Credit Suisse numbers. Down 2% pre-open.

4) Exxon disappointment. Exxon's earnings were widely expected to be sub par due to poor refining margins; they didn't disappoint on that front. However, there are other things going on. One commentator emailed me to say he was also surprised at the lack of production growth - down about 2% - that tells you all you need to know about oil prices. You drill all over, this commentator noted, and you can't get production to move higher. Many oil watchers think these declines are far way more serious than anyone thinks. Down 2% pre-open.

5) For a look at what poor refining margins can do when you don't have anything to offset them against, look at refiner Tesoro. While oil prices are near a record, gasoline refiners cannot raise their prices as fast. Good for consumer, not good for refiners like Tesoro, which reported earnings well below expectations on that classic margin squeeze. Down 3% pre-open.

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