Now Boarding: The Flight To Safety

The flight to safety trade continues, with the Dollar Index rallying to near 3-month highs.

Predictably, futures are down in the U.S., European banks are weak in Europe, bonds are up, and gold and other precious metals are rallying; gold at $966 this morning is continuing its slow march to $1,000 an ounce. It briefly climbed over $1,000 in March of 2008.


1) We are reporting that details on the public/private partnerships for getting rid of bad bank assets will come within weeks, and the President is expected to announce very detailed plans on a housing package tomorrow.

The market does not seem to believe this will make a big difference. There is not much excitement about the viability update from GM and Chrysler we are waiting for after the bell.

LeBeau: Can GM/Chrysler Pass Their Mid-Terms?

2) Futures dropped again at 8:30 ET as the Empire State manufacturing index fell much more than expected.

3) Copper futures dropped early morning, along with commodity stocks, on concerns about weaker demand.

4) Wal-Mart up a little over 1 percent pre-open, came in with earnings ahead of expectations ($1.03 on continuing operations), guidance for the current quarter of $0.72-$0.77 is good ($0.77 analyst estimate), and full year guidance of $3.45-$3.60, with consensus estimate of $3.59.

The company said that January finished strong, and that February was "off to a good start."

As with many global companies, currency fluctuations (dollar strength) are really messing with earnings: international sales dropped 8.4 percent, but adjusted for currency fluctuations sales INCREASED 9 percent.

5) Deere down 6 percent pre-open on a Goldman Sachs downgrade; no surprise here, since farmers are having a hard time getting credit. JP Morgan had already lowered earnings last week.

6) Thanks for the favor: you think Warren Buffett got a good deal with his 10 percent yield for his investment in Goldman Sachs ? That's nothing: John Malone's Liberty Media is getting a 15 percent interest rate for a $280 million loan to SIRIUS XM . All fully secured, of course. SIRIUS will us the money to pay off a $171.6 million loan that is coming due TODAY.

7) Dunk this in your donut: today Starbucks will unveil its new "Via" instant coffee that will sell for less than $1 per cup.



Questions? Comments?