Morning Dew - 23 September 2013

Key Points

• JCI ended the week with a strong footing after the index rallied on the Fed's decision to do nothing. The move got almost the entire market wrong-footed and realizing that the uncertainties have returned to the Fed's timing of its first tapering, investors flock back to stocks at the expense of the greenback. Around the globe, stocks were also largely positive and for the week the Dow has gained 0.49%. Friday saw a steep drop however, as the St Louis Fed governor Mark Bullard said that a small tapering may be in place in the next month's meeting.
• Based on the poll taken after the Fed's decision, 24 out of 41 people surveyed said the first tapering may have to wait until December. Bullard's statement on Friday however, added uncertainties over the timing of the first tapering as it could be done as early as next month. In the meantime, the US is facing another risk of shutdown as the US Treasury is seen out of capability to borrow funds in mid-October. A deal must be struck by the end of this month to dodge such scenario. Based on historical records, this shutdown issue is most likely not a big danger at all. Last December's fiscal cliff issue turned out to be non-event as deal was struck. This time it won't be any different at all.
• There is no change in view on the active recommendations, but we are adding ACES and AISA back into the pool. ACES is recommended for entry at 700-730, with stop set below 630 and target set at 900; AISA is recommended at 1280-1300 with stop set below 1120 and target at 1460. We may have some turbulence this Monday as JCI may track the Dow's weakness last Friday. 

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