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Current Futures: Dow -7.00, S&P -2.50, NASDAQ -2.00

European markets and U.S. futures lacked a clear direction in initial trade, as mixed reports hit the market’s valuation

Asian markets had a very strong momentum earlier in the day, having the Japanese Nikkei advancing as much as 2%, but then shed an important part of gains as the market headed towards the closing bell. Around the European open, mixed reports started appearing on the news wires. The first was the rumor that CIT, a U.S. bank, faced little chance of avoiding bankruptcy at this point. 

According to industry analysts, the CIT balance sheets looks good, to some extent, but the company faces a big liquidity shortfall, as around $1 billion of debt will roll over in the upcoming period. If CIT goes into bankruptcy, it would be fourth largest bankruptcy in the U.S. history, and it would be the first bank to be insolvent even though it accessed TARP funds. 

In addition, a report showed that U.S. foreclosures reached a record 1.5 million properties throughout the first half of the year. Interestingly enough, an important part of these defaults, 1/3, came from prime loaners, which have the highest credit scores. TheLFB-Forex.com Trade Team commented that, the default rate is set to soar in-line with the unemployment rate, since usually the two go hand in hand. This shows that more pain is likely to hit the already damaged housing market. 

Following these reports, the European cash markets and the U.S. futures maintained no clear direction overnight. The German Dax and the U.K. FTSE moved side-ways, around the highs touched on the prior day. S&P futures had the same fate, moving only side-ways in a four basis points side-ways channel.

Ahead, a number of very important companies are expected to report that are likely to have strong influence in today’s market: Amphenol Corporation, Baxter International, Biogen Idec, Genuine Parts, Google, Harley-Davidson, IBM, JPMorgan Chase, Marriott International, Nokia, People's United Financial, Polaris Industries, PPG Industries. 

Overnight, the U.K. FTSE declined 7.51 points (0.17%) to 4,338.95, while t he German Dax lost 5.05 points (0.10%) to 4,923.39

Crude oil for August delivery was recently trading at $61.80 per barrel, lower by $1.10. 

Gold for August delivery was recently trading lower by $2.60 to $935.20. 

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