Today's publication of the latest Federal Open Market Committee minutes is unlikely to resolve uncertainty over the likelihood of a third round of quantitative easing, according to analysts. While hopes for QE3, along with its European and Chinese equivalents, have driven much of the recent stock market rally, they have never been substantiated by policymakers. Recent U.S. economic data has suggested that things may not be bad enough to justify another cash injection yet, and July's existing-home sales data, due at 10 a.m. EDT, may reinforce this perception; it is expected to show a modest rise in sales from 4.37 million in June to 4.5 million in July.
Overnight news that Japan's exports fell sharply over the last quarter may also dampen traders' enthusiasm. Exports fell by 8.1% on a yearly basis -- considerably worse than the forecast 2.9% fall. Exports to China, Japan's biggest trading partner, fell by 11%, while exports to Europe fell by 25%, providing further proof that the eurozone crisis is affecting the global economy.
In company news, Dell downgraded its full-year earnings guidance to $1.70 per share last night, disappointing analysts, whose consensus forecast was $1.90 per share. Dell was down 5% in after-hours trading and may fall when markets open this morning. Corporate results due before markets open this morning include Toll Brothers and American Eagle Outfitters, while Hewlett-Packard is expected to report after the bell tonight.
In Europe this morning, markets slipped as sentiment turned negative once more and traders took profits. At 7 a.m. EDT, the main European markets were all lower: The DAX and CAC were both down 0.9%, the IBEX was down 1.5%, and the FTSE MIB was down 0.4%. In London, the FTSE 100 (INDEX: ^FTSE ) was one of the biggest losers, down by 1.1% as mining shares fell and a number of big stocks went ex-dividend. The morning's biggest faller was DIY store owner Kingfisher, which fell by 3.5% following a downgrade by Deutsche Bank.
Finally, billionaire investor Warren Buffett doesn't own shares in Kingfisher, but he did recently purchase another well-known British blue chip brand. Buffet spent more than $1 billion, taking his stake in this FTSE 100 company to more than 5%. The company concerned is a famous British name with global expansion potential -- and you can discover the identity of the company and the price Buffett paid in this special exclusive report. Best of all, the report is free -- so download it today while it's still available.
Are you looking to profit from this uncertain economy? "10 Steps To Making A Million In The Market" is The Motley Fool's latest report. We urge you to read it today -- your wealth could be transformed. Click here now to request your free, no-obligation copy. The Motley Fool is helping Britain invest. Better.
Further investment opportunities:
- Why American Investors Should Buy British Shares
- Eight Stocks Held By Britain's Super Investor
- The Market's Top Sectors