US stocks had been under pressure overnight after toymaker Mattel continued a series of high profile disappointments on earnings and guidance. The tide may be turning this morning, however, with industrial bellweathers General Electric and Honeywell beating the street to indicate that not all companies are underperforming this quarter. Likewise positive reports from regional banks SunTrust and Comerica also indicate that many parts of the US economy continue to well despite struggles in the technology, energy and export sectors. Asia Pacific indices continued to advance overnight with China leading the way higher once again, which is particularly interesting in that it shows enthusiasm or at least reduced fears of an economic meltdown ahead of the big Chinese data announcements that kick off the upcoming trading week. USD has been on the rebound today outperforming gold and other majors to keep its sideways trend intact. JPY, NZD and AUD which had been outperformers lately took the brunt of this change in direction Greenback support has come in to stop a free fall after yesterday’s employment plus inflation data and comments from FOMC members Dudley and Mester. Dudley indicated that there isn’t as much dissention at the Fed as recent conflicting member comments have made it seem and that the central bank could still raise interest rates this year. Recent data disappointments had fuelled speculation the Fed may hold off liftoff until next year some time, but yesterday’s news indicates that is not a slam dunk and the next two meetings could be close calls either way. I still think a one and done hike this year with the timing depending more on when the US budget and debt ceiling may occur than the data. Yesterday, Treasury Secretary indicate the debt ceiling could be hit November 3rd, moving up the timetable for a showdown by a month from early December to early November. This could leave the Fed with a choice between raising in October to get ahead of a possible crisis or holding off to December in the hope that it all blows over by then. US markets could be active through the morning around the industrial production and consumer sentiment reports, while oil could be active around the weekly Baker hughes drill rig count. Corporate News General Electric $0.28 vs street $0.26, sales $31.6B vs street $28.6B Mattel $0.71 vs street $0.80, sales $1.79B vs street $1.89B, ($0.20) impact to EPS from higher USD in the quarter SunTrust Banks $0.89 vs street $0.84 Comerica $0.74 vs street $0.70 Honeywell $1.60 vs street $1.55, sales $9.61B below street $9.85B Schlumberger $0.78 vs street $0.77, oilfield activity expected to decline further into 2016 as customers go conservative on price forecasts Economic News Significant announcements released overnight include: Canada manufacturing sales (0.2%) vs street (1.0%) Eurozone trade balance €11.2B vs street €20.2B Eurozone consumer prices (0.1%) as expected Eurozone core CPI 0.9% as expected Poland core CPI 0.2% vs street 0.3% Poland average gross wages 4.1% vs street 3.3% Poland employment 1.0% as expected NZ Q3 consumer prices 0.4% vs street 0.3% Singapore electronic exports 2.8% vs street 1.2% Singapore non-oil exports 5.7% vs street (3.9%) Upcoming significant announcements include: 9:15 am EDT US industrial production street (0.2%) 9:15 am EDT US manufacturing production street (0.2%) 10:00 am EDT US UMich consumer sentiment street 89.0 10:00 am EDT US UMich 1-yr inflation estimate street 2.8% 1:00 pm EDT US Baker Hughes drill rig count previous 795 11:30 pm NDT Sun 11:00 pm ADT Sun China GDP street 6.8% 10:00 pm EDT Sun China retail sales street 10.8% 9:00 pm CDT Sun China industrial production street 6.0% 8:00 pm MDT Sun China fixed assets street 10.8% 7:00 pm PDT Sun 10:30 pm EDT Sun China Bloomberg Sept GDP previous 6.64% CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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