So far, today has been shaping up like a repeat of yesterday. Asia Pacific markets sold off in catching up to yesterday’s US declines but then Europe has stabilized and US indices appear to be heading toward a higher open. What’s different today is that the FTSE
and IBEX have joined the rebound in Europe.
It remains to be seen if bulls will be able to keep things going this time or if they could get overwhelmed by bears as they did yesterday. The NASDAQ has the potential to underperform due to the negative reaction to Apple’s disappointing guidance overnight, although this may be partially offset by merger activity in the tech sector.
Some of the defensive flows we say yesterday have reversed a bit with gold and silver backsliding along with JPY and CHF. Concerns over emerging markets may be easing a big after the PBOC injected CNY 150 million into China’s financial system, India announced a surprise interest rate increase. Turkey’s central bank is holding a meeting later today amid reports of a potential rate increase or other moves to shore up TRY.
AUD and NZD have been rallying again overnight as it appears traders have been finding their relative stability and higher interest rates attractive particularly with the potential for an RBNZ rate increase tomorrow. CAD, on the other hand, was unable to maintain yesterday’s rebound and has dropped back to the bottom of the pack once again as it resumes its weakening trend.
Overnight US gains have been tempered somewhat by today’s poor durable goods report which may have been impacted by the particularly rough winter in many parts of the country. All eyes remain fixated on the Fed which is still expected to continue its tapering program with a $5-10B cut to QE.
Apple $14.50 vs street $14.09, sales $57.5B vs street $57.4B, revenue guidance falls short $42-$44B vs stret $46.1B
Seagate Technology $1.32 vs street $1.39
DuPont $0.59 vs street $0.55, guidance $4.20 to 44.45 vs street $4.33
Ford $0.31 vs street $0.27
DR Horton $0.36 vs street $0.31
Martin Marietta has agreed to acquire Texas Instruments in a $2.7B all-share deal.
Kansas City Southern raises dividend 30% to $0.28
Significant economic announcements released yesterday afternoon and overnight include:
US durable goods orders (4.3%) vs street 1.8%
US durables ex transport (1.6%) vs street 0.6%
India repurchase rate 0.25% increase to 8.00% no change had been expected
UK GDP 2.8% as expected vs previous 1.9%
Australia leading indicator 0.2% vs previous 0.5%
Australia NAB confidence 6 vs previous 5
Australia NAB conditions 4 vs previous (3)
Economic reports due later today include:
10:00 am EST US consumer confidence street 78.0
10:00 am EST US Richmond Fed street 13.0
5:00 pm EST Turkey interest rate decision 4.50% no change expected