Wall Street Update and Outlook
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Previous close
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Chg
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% chg
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DOW
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11,143.69
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80.91
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0.73%
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Nasdaq
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2,480.66
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11.89
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0.48%
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S&P
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1,184.71
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8.52
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0.72%
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Source: Yahoo Finance
Citigroup led the rebound in bank stocks on an upbeat earnings report. It jumped 5% yesterday night. However, this cannot be said for energy stocks which weakened as Halliburton slumped over its 3Q results. Retailer stocks also did not have a good day as well as JC Penney declined in response to a short-term stockholder rights plan that is likely intended to fight off institutional control.
Fewer than 1b shares were transacted on the NYSE, which came after Friday’s total hit 1.42 billion shares, the second highest sum since mid-July.
Personal opinion: Apple and IBM have reported results but their shares slumped in after hours trading. Bank of America and Goldman Sachs will be reporting results tonight. Investors are likely to scrutinise their results, as well as, their comments on the ongoing foreclosure issue.
I reiterate that traders to keep their tight stop losses for their long positions or to initiate partial short positions (e.g. put warrants etc)
Schedule of Economic News for the Day (SIN time)
08.30 am – AUD – Monetary Policy Meeting Minutes
05.00 pm – EUR – German ZEW Economic Sentiment
06.00 pm – GBP – CBI Industrial Order Expectation
08.30 pm – USD – Building Permits
09.00 pm – CAD – BOC Rate Statement
US / Overseas Economic News
1. U.S. Industrial production unexpectedly fell 0.2% against the forecast of 0.2% gain. Factory production also decreased 0.2%, reflecting declines in consumer durable goods, like appliances and furniture.
2. Net buying of U.S. long-term instruments totalled $128.7 billion in August compared with net buying of $61.2 billion in July, according to data from the Treasury Department.
3. According to The National Association of Home Builders, the monthly index of builders’ sentiment rose in October to 16, the first increase in five months. Readings < 50 signify negative sentiment about the market. The last time the index was above 50 was in April 2006.
US / Overseas Corporate News
NA.
US Corporate Results Update & The Week Ahead
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Companies
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Stk Symbol
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Actual
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Consensus
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Citigroup
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C
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0.07
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0.06
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Halliburton
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HAL
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0.58
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0.56
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Apple
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AAPL
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4.64
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4.08
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IBM
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IBM
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2.82
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2.75
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Source: Briefing.com
19 Oct before market opens Bank of New York / Bank of America / Goldman Sachs /
Johnson & Johnson / State Street
19 Oct after market closes Boston Scientific / Juniper Networks / Western Digital / Yahoo
20 Oct before market opens Morgan Stanley / Wells Fargo
20 Oct after market closes eBay / Seagate / Xilinix
21 Oct before market opens Caterpillar / Eli Lily / Seagate / Xerox
21 Oct after market closes Amazon / American Express / Sandisk / Wipro
22 Oct before market opens LM Ericsson / Schlumberger
Asian Markets Update on Previous Close
Asian: Asian stocks indexes ended mostly lower Monday, as resources plays around the region took a hit from a recovery in the U.S. dollar and softer prices for commodities and Korean shares lost ground on disappointment over recent earnings reports.
Japan’s Nikkei Stock Average finished flat, Australia’s S&P/ASX 200 lost 0.8% and South Korea’s Kospi Composite slid 1.4%. China’s Shanghai Composite Index shed 0.5% and Hong Kong’s Hang Seng Index fell 1.2%. Taiwan’s Taiex dropped 1.8%, Singapore’s Straits Times Index fell 0.7%, Malaysia’s KLCI shed 0.6%, Philippine shares were flat, Indonesian shares slipped 0.8% and Thailand’s SET lost 1.5%.
On the upside, New Zealand’s NZX-50 tacked on 0.2% and India’s Sensex added 0.2%.
STI Market Update on Previous Close and Outlook
STI: Singapore shares closed lower Monday as worries about U.S. foreclosures outweighed Global Logistic Properties’ robust debut, prompting investors to book profit on gains made by local equities last week.
The benchmark 30-share Straits Times Index closed 0.7%, or 23 points, lower at 3,181.27, with 344 losers to 161 gainers. Trading volume was sharply higher at 2.29 billion shares valued at S$2.67 billion compared with 1.57 billion shares Friday.
Personal opinion: It may be better for traders and investors to take some profit off the table in view of the heavy results reporting week coming from the U.S. and the ongoing controversy of this foreclosure issue.
STI supports and resistances are:
Current: 3,181.27
Support 1: 3,165
Support 2: 3,136-3,139
Resistance 1: 3,195
Resistance 2: 3,220
SIN / Asian News
1. In Australia, BHP Billiton lost 1.1% and Rio Tinto shed 0.3% after the two mining giants on Monday terminated a planned US$116 billion iron ore deal as it was rejected by overseas regulators over anti-competition concerns.
SIN Companies News
1. Keppel Land said it bought residential sites in Chengdu, China, for 1.8 billion yuan ($270.8 million). Its shares climbed 3% to S$4.46.
2. Ascendas Real Estate Investment Trust said first-half distributable income rose to S$124.9 million from S$122.6 million a year ago.
3. M1 said 3Q net income increased 16% to S$39.5 million from a year ago. Analysts expected profit of S$40.4 million, based on estimates compiled by Bloomberg. The stock gained 0.5% to S$2.25.
SIN Technical Highlights*
1. SGX: After reviewing the chart, I decide to discard the idea of shorting SGX on a retracement play as the risk to reward is not beneficial to me.
2. Ezra results out on 22 Oct. It typically halts trading on that day of results release during lunch time. Analysts are expecting solid results and better results going forward. A cluster of strong support set at $1.73 – $1.78. Resistance at $1.94. Traders may consider accumulating at the support region in anticipation of good results.
*This is to highlight stocks which are worth to look into from a technical standpoint for a small punt (i.e. with smaller gains over a shorter period of time) It involves speculation and may not meet the needs of certain clients. In addition, this strategy involves cutting loss if necessary. Thus, this mentality may not be suitable for some clients. Furthermore, entry and exit levels may change depending on market and chart conditions.
Commodities Update
Nov crude oil powered higher by 2.3% to $83.08 per barrel amid an ongoing strike at French refineries, coupled with a pullback in the dollar index.
The slide in the dollar index helped precious metals recoup overnight losses. Dec gold finished just fractionally higher at $1372.10 per ounce, while Dec silver closed up 0.8% to $24.41 per ounce.
All the best for your investment and trading!
Information sources: Various sources such as Bloomberg, Briefing.com, Dow Jones, forex calendar, Reuters, SGX, Yahoo Finance etc.
*This news update was delayed. It was sent out to my clients in the morning.
Disclaimer
The information contained herein is the writer’s personal opinion and provided to you for information only, and is not intended to, or nor will it create/induce the creation of any binding legal relations. The information or opinions provided herein do not constitute an investment advice, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise. You may wish to seek advice from an independent financial adviser before making a commitment to purchase or invest in the investment product(s) mentioned herein. In the event that you choose not to do so, you should consider whether the investment product(s) mentioned herein are suitable for you. The writer will not, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials appended herein. The information and/or materials are provided “as is” without warranty of any kind, either express or implied. In particular, no warranty regarding accuracy or fitness for a purpose is given in connection with such information and materials