Overnight Markets Head Higher, While U.S. Futures Stable

Current Futures: Dow +21.00, S&P +2.50, NASDAQ +1.80

European Trade: European markets opened slightly above the break-even line, while the Asian markets managed to turn around and close higher for the trading session. U.S. futures traded mixed overnight. 

During the Asian session, the Topix index closed higher for an eighth consecutive day, the longest winning streak since 2004. In the European session, the financials traded mixed, but commodity stocks continued to advance. Aviva, the biggest U.K. insurer plunged 13% from the first minutes of trading.

European officials seem determined not to adopt any new stimulus bill, or extend the previous ones. Last week, Mr. Trichet said that the ECB does not support any additional stimulus, while it also mentioned that governments should pledge for a healthy fiscal policy. In the Euro-zone, it means a maximum 3% deficit over the long-term, but many countries have gone a few percentage points above the limit. As a comparison, the U.S. budget is projected to have a 12% shortfall this year.

Today, Mr. Trichet’s calls were echoed by the Governor of the Bank of England, Mr. Mervin King, who declared that the U.K. government cannot afford a second stimulus bill, as the country already faces a rather big deficit. In the past months, the U.K. government has been warned by the European Commission to reduce its growing deficit. The Financial Times noted that this is an unconventional move made by the central banker, to criticize the country’s fiscal policy. Even though it is unofficial (so far), the U.K. Treasury seems to support Mr. King’s speech.

In other news, Goldman Sachs said it plans to repay the $10 billion bailout funds it received from the U.S. Treasury. Sources have said that the bank is looking to repay its debt in the following months. Goldman made this decision as a number of banks are becoming anxious about the new restrictions and terms imposed by Congress. Moreover, a number of smaller regional banks have already applied to repay the bailout funds, citing similar reasons.

In a Wall Street Journal interview, Goldman’s CEO said he does not know if the bank is preparing to repay its debt. Keep in mind, the bank has said repeatedly in the past that it has a limited, very small exposure to AIG. It turned out that Goldman had actually the biggest exposure to the insurer, worth of couple of billion dollars.

Tonight, the Nikkei fell 8.31 points (0.10%) to 8,479.99. The Australian S&P/Asx added 29.30 points (0.82%) to 3,609.30. The U.K. Ftse added 6.32 points (0.16%) to 3,917.78, while the German Dax gained 6.47 points (0.15%) to 4,193.83.

Crude oil continued to decline in the overnight session. Crude oil for April delivery fell $0.90 to $53.00

Gold rose, helped by the negative equity markets. Bullion for immediate delivery gained $2.40 to $928.40.