US equities earnings

US corporate earnings released so far this week have, on the whole, beaten or met estimates - albeit largely reduced expectations. Whilst dollar strength concerns have been a point of contention for names with a strong international exposure, these companies have proven able to adjust and hedge out currency risks better than they had in the previous quarter. Companies, for example, including Microsoft, Proctor & Gamble and Caterpillar have adjusted well not only to currency issues, but also to an overall decline in general business conditions outside the US. Another ongoing theme in this week’s reports also is that of an improving domestic market. Starbucks Corp, for one, said last night after the markets’ closed that sales at its coffee shops in the Americas region had grown more than expected. Shares in the coffee chain jumped more than 5% in after-hours trading. Overall, the US SPX500, together with the other key US equity indices, has underperformed against most major peers in Europe and Asia, both on a local currency and USD basis. From the technical perspective, the US S&P500 has the potential to form a triple top. A break and close through 2120, however, could see the market power through all-time highs!


The set up for the Dollar Sing looks interesting here. The sell-off over these past weeks has been largely on the back of data releases showing that the Singapore economy may not be as bad as expected. First we saw GDP numbers coming in better than estimated last Tuesday. This was followed late last week by a stronger NODX read. Through this period, we also had MAS come in to say that they will keep policy unchanged. This may have gone against the grain of market expectations, that a continually easing stance may have been the likely message in the scheduled release last week. Today’s read of the Industrial Production numbers - out at 1 pm local time - could trigger a move from here. Looking at the charts, with considerable downward momentum gathered over the last six weeks, traders may be eyeing the 1.34 psychological level as a first support or the stronger Fibo level of 1.3345 support. Failure to break these could see an initial push back towards 1.35 and beyond.
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