Current Futures: Dow -72.50, S&P -10.50, NASDAQ -10.75
European Trade: European stocks opened slightly below the break-even line, while Asian markets closed lower, despite posting strong gains intra-session. During the overnight session, U.S. futures continued to point to a lower opening on Wall Street.
A Bloomberg report shows that the U.S. government may be forced to put GM and Chrysler into bankruptcy, in order to recover a $17.4 billion in loans. For now, the U.S. Government needs to stay in line to collect money, after a number of banks were bailed out by the Government, to recover its debt in case the two car manufacturers go into bankruptcy.
If the Government and the private investors do not reach an agreement, the U.S. authorities might be tempted to call for a “debtor in possession” bankruptcy procedure, which would make the Government the first in-line to see its debt repaid. Currently, GM has a $45.16B debt, while its current market cap is $1.73B. In case the Government has no other choice and would eventually call for the bankruptcy procedures, the labor market will be hit very hard, again.
Remaining in the car-industry, Toyota announced an 83.2 billion yen, or $0.9B, loss in the quarter ending in December, and said that the company had been forced to shed 20.000 jobs, or about 8% of its global work force. Nissan sales fell by 18.6% in the fourth quarter, compared with one year earlier.
The U.K. Ftse fell 0.40 points (0.01%) to 4,291.47, while the German Dax lost 17.57 points (0.38%) to 4,627.06.
Crude oil broke below the $40 benchmark level overnight. Crude oil for March delivery fell $0.70 to $39.60.
Gold has traded in the same range lately even though the dollar has seen some large swings. Bullion for immediate delivery fell $2.10 to $904.50.
Previous Asian trade: Tonight the Nikkei shed 107.59 points (1.33%) to 7,969.03. The Australian S&P/Asx rose 38.70 points (1.12%) to 3,508.60.