Stocks were mixed as the euphoria from ECB President Mario Draghi’s dovish news conference and the PBoC’s interest rate cut wore off. Now investors are being cautious ahead of the FOMC announcement on Wednesday and the Bank of Japan’s on Friday.

 

 

 

 

 

 

 

United States

 

 

The Dow Jones industrials and the S&P edged lower after recent gains. Energy shares slipped with oil prices and Apple retreated a day before its quarterly results. The Dow was virtually unchanged (down 2.84 points) and the S&P was down 0.1%. The Nasdaq however added 0.2%. Traders are looking ahead to a busy week of corporate earnings reports and a Federal Reserve policy announcement.

 

Xerox slumped after its quarterly revenue missed expectations. The company said it would review its business and spending plans. LendingTree gained after the online mortgage broker reported better than expected results for the third quarter. LendingTree also raised its revenue estimate for the year and it gave an optimistic forecast for 2016. LabCorp rose after its third quarter results topped estimates. Bridgestone said it would buy the auto parts and repair company Pep Boys for US$835 million or US$15 per share in cash. The purchase will add 800 locations to Bridgestone’s nationwide network of 2,200 tire and automotive service centers. Shares of Pep Boys jumped.

Housing stocks came under pressure after a surprise slump in sales of newly built homes. September sales plunged 11.5%. New home sales are highly volatile and a small portion of home sales. Shares of DR Horton, KB Home and PulteGroup retreated. Duke Energy said it would buy Piedmont Natural Gas for about US$4.9 billion, or US$60 per share. The deal will give Duke about a million new customers in the Carolinas and Tennessee. The companies are already partners on the Atlantic Coast Pipeline, which will be the first major natural gas pipeline serving Eastern North Carolina.

Gold at the afternoon London fixing was up US$5.15 to US$1,166.40. Copper futures were up 0.2% to US$2.35. WTI spot crude was down 66 US cents to US$43.94. Dated Brent spot crude was down 53 US cents to US$47.46. The US dollar was down against the euro, yen, pound and the Canadian and Australian dollars. However, it advanced against the Swiss franc. The Dollar Index was virtually unchanged. The yield on US Treasury 30 year bond was down 3 basis points to 2.87% while the yield on the 10 year note declined 4 basis points to 2.05%.

 

 

 

 

 

 

 

 

 

Europe

 

Shares were mixed Monday with profit taking mostly responsible for the declines following strong gains at the end of the previous trading week. Investors are awaiting Wednesday's FOMC announcement with expectations that interest rates will be unchanged. However, analysts will be keeping a close eye on the accompanying statement. There was little economic data to drive trading with the exception of German business confidence for October, which weakened less than anticipated. The FTSE was down 0.4% and the CAC lost 0.5%. The DAX inched up 0.1% and the SMI was virtually unchanged.

Dialog Semiconductor declined after the company reported that its net income for the third-quarter increased to US$43.0 million from last year's US$25.6 million, with earnings per share improving to US$0.55 from US$0.36 in the same quarter last year. Both Deutsche Bank and Commerzbank retreated. Volkswagen, Daimler and BMW were down. In Paris, Peugeot, which reported revenue data for the third quarter, declined as did Renault. Total and Technip were lower. In London, WPP was down the after advertising company released third quarter revenue figures. Aberdeen Asset Management climbed after a newspaper report said the company has begun to sound out potential buyers as it faces challenging markets amid the economic slide in China.

 

 

 

 

 

 

 

 

 

 

 

Asia Pacific

 

 

Stocks were mixed Monday as Asian investors had their first opportunity to react to China's surprise interest rate cut and upbeat earnings from US tech giants. However, positive momentum petered out somewhat in the afternoon as investors looked ahead to Chinese Communist party's central committee meeting from Monday to Thursday and central bank meetings in the US, Japan and New Zealand.

The Shanghai Composite was up 0.5% after climbing as much as 1.3% to hit a two-month high in early trade. Banks declined after Agricultural Bank of China reported muted earnings for the third quarter. The Peoples Bank of China on Friday after markets here were closed cut both interest rates by 25 basis points and lenders' reserve requirements by 50 basis points in a bid to prop up its cooling economy. The Hang Seng retreated 0.2% as investors waited to see whether Beijing will unveil fresh stimulus measures to bolster growth at the end of key Five-Year Plan policy meeting that runs through Thursday.

The Nikkei added 0.6% after the Chinese move and a declining yen. Mitsubishi Electric, NTN, Asahi Kasei, Pioneer, Hitachi and Panasonic climbed. While Hitachi raised its first-half net income forecast, Panasonic surged higher on expectations it would report bumper profits. Toshiba rallied on a Nikkei report that it is preparing to sell its image sensor operations to Sony for about ¥20 billion.

The S&P/ASX slipped 0.1% while the All Ordinaries was virtually unchanged. Both miners and banks were mixed. The Kospi added 0.4% while the Sensex was 0.4% lower.

 

 

 

 

Looking forward

 

 

The Eurozone reports September M3 money supply. The UK releases its first estimate of third quarter gross domestic product. In the US, September durable orders, August S&P Case Shiller house price index and October consumer confidence will be released along with the October Richmond Fed manufacturing index. The FOMC meeting begins.

 

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.