US Investment Views 5 Nov

Asia

Asia markets were up NIKKEI 225 +2.86%, HSI +1.39%, SHSE +1.38%, S&P/ASX 500 +1.17%. The markets are still ridiculously happy about QE2. Would that be a short squeeze? Perhaps.

Bank of Japan said it will buy J-REIT and ETF today. Nothing new from last time, we know that from last meeting.

With the US Fed pumping money, the currency war tension is mounting again. China is now again bashing US for there proposal to limit current account balance. Certainly, the proposal to limit current account itself is a joke, so no wonder that China will object the plan, especially it has a huge current account surplus. Watch that for G20, for sure they will argue about this again.

Europe

Europe was down in earlier trading, though it turned positive after the US job numbers. HSBC (5.HK, HSBA.L) said its profit in the first 3 quarters was ahead of the same period of last year, but warned of the challenging environment in emerging markets as too many players want to get into that market.

US equities preview

US futures are slightly up after the job report. Non-farm payroll increased 151,000, way above market expectation of 60,000, while unemployment rate maintained at 9.6%. US futures immediately reversed earlier slight losses. Interestingly, the US dollar strengthened immediately after the announcement, and bond yields increased. Some might think that the Fed might end up buying less that US$600bn, although it is absolutely too early to say that it is going to happen.

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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.