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2006-08-03 :: Surprise Rate Hike in London

The Bank of England (the Federal Reserve’s British counterpart) raised rates today in a surprise move that sent European stocks down.  Some early earnings reports are mixed here in the states (energy and metals earnings are reported higher than expected at Rio Tinto, Kerr-McGee and Penn Virginia; weaker than expected earnings in consumer-centric stocks like Prudential, Starbucks, and Sprint-Nextel).

My guess is that the market will open lower today based upon fears that the Fed will follow BoE in surprising everyone with higher than expected rate hikes, plus oil is trading higher which should fuel inflation fears.

Hopefully, we’ll see the energy  and metals sectors higher based on earnings growth.

Another day of market turmoil as we head toward the August 8th rate hike.

More later!