US Investment Views 18 Oct

Good Morning New York! Another week of trading, here comes your daily digest.

For the wrap up of last week, see our weekly wrap up.

Asia

Despite the positive mood in the papers this morning as I mentioned in the Asia morning views, Asian markets were largely down on Monday. NIKKEI –0.02%, HSI –1.21%, SHSE –0.54%. China market dropped for the first time in 8 days, and this might have an effect on Hong Kong market as they are now becoming more and more correlated. Of course, I am also looking very closely at the Dollar Index (DXY) as I pointed out the close reverse relationship between stock and DXY, and DXY is strengthening today, so that is the possible explanation of what is happening in Asian markets today, even though there are not much news flow around.

Europe

Europe looks like in positive territory at this moment. In the UK, the Rightmove property prices number rose, contradicts with the Halifax home prices index. Other headlines include Rio Tinto (RIO.L) and BHP Billiton (BHP.L) scrapped the iron ore deal. In France, strikes continued, showing no sign of stopping.

US equities preview

Big news today is Industrial production number which unexpectedly dropped in September. Citi (C.N) reports 3Q result just now. The bottom-line beats estimate, with diluted EPS of $0.07 vs. $0.05 Bloomberg estimates. I am mainly interested in the foreclosuregate, unfortunately nothing said specifically in the announcement, so they might choose to say things only after the result conference call.

Futures were down but paring some losses after a seemingly better-than-expected results of Citi (C.N). Tech stocks seem to be still doing well, while financials are still under pressure. Investors might be getting more cautious now, finally, after an uninspiring speech by Ben Bernanke and the on-going foreclosuregate saga. More light may be shed after Citi conference call, but for now, there is a leaked internal memo from Wells Fargo on how to deal with repurchase requests from mortgage investors. I think investors should keep a close eye on all these stories.

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About Zarathustra

Zarathustra: Founder and Managing Editor of Also sprach Analyst. Once an analyst, now an investor and entrepreneur. Based in Hong Kong, but Londoner at heart.