Morning Dew - October 31st 2013

Key Points

Doldrums

• Market continues to move back and forth between gains and losses as fresh catalysts remain absent. At the moment the gains and losses hinge on the Fed speculation over tapering and the impacts from releases of several not-so-significant-data.
• U.S. stocks slipped as the FOMC delivered its decision to keep the stimulus amount intact after a 2-day meeting as widely expected.
• Domestically, earnings season will be stealing the market attention in the absence of key global issues and data.

Sales and Confidence Slipped

• Private sector hiring slowed in October to 130k compared to September 145k and below the consensus of 150k.
• Consumer Price Index accelerated to 0.2% in September faster than 0.1% seen in August, an in line with consensus. Ex-food and energy, the inflation stays at 0.1%, less than the expected 0.2%. 

Technically Speaking...

• JCI remained subdued as there has been lack of significant catalysts around. The index however, resilient above its daily and weekly EMA bands.
• Recent high at 4,611 will act as near-term resistance, followed by 4,791 and 4,900 while the nearest support will be at the upper end of the EMA band at 4,530, followed by recent low at 4,499. 
• Daily indicators hinted at exhaustion as volume slipped along with declining MACD and RSI, but as the index stays above the EMA band, the outlook stays positive.
• No changes in the pool of recommendations for now. All are on hold.

Day Ahead

The doldrums set to continue after the Fed meeting passed with no big surprise. Jobless claims data will be released this Thursday, but expect minor impact from the data. Market’s attention will be more focused on the domestic earnings released.

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Morning Dew - October 30th 2013

Key Points

Doldrums

• Market continues to move back and forth between gains and losses as fresh catalysts remain absent. At the moment the gains and losses hinge on the Fed speculation over tapering and the impacts from releases of several not-so-significant-data.
• Domestically, earnings season will be stealing the market attention in the absence of key global issues and data.
• APII jumped on its debut at the IDX on Tuesday. The distributor of valves and other industrial items is a subsidiary of Unimech Group, a Malaysian company, is the 26th addition to the listed company at the IDX this year. 

Sales and Confidence Slipped

• US retail sales fell 0.1% in October, while US consumers were less confident in October due to budget dispute.
• Consumer confidence fell from 80.2 to 71.2 in October, way below the consensus  of 75.0.

Technically Speaking...

• JCI remained subdued as there has been lack of significant catalysts around. The index however, resilient above its daily and weekly EMA bands.
• Recent high at 4,611 will act as near-term resistance, followed by 4,791 and 4,900 while the nearest support will be at the upper end of the EMA band at 4,550, followed by recent low at 4,499. 
• Daily indicators hinted at exhaustion as volume slipped along with declining MACD and RSI. On the weekly basis however, the volume has started to tick up, while MACD’s ascend accelerated. Overall, the outlook for the coming week is cautiously positive.
• No changes in the pool of recommendations for now. All are on hold.

Day Ahead

ADP employment data and Consumer Price Index are to feature in Wednesday’s economic data slated for release. Private sector hiring is seen declining in October to 148k from 166k a month earlier. Meanwhile, CPI are expected to have grown 0.2% in September, but as the inflation stays subdued, the data is likely to be a non-event. The Fed is also going to conclude its policy meeting but no change is expected. 

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Morning Dew - October 29th 2013

Key Points

Doldrums

• Market continues to move back and forth between gains and losses as fresh catalysts remain absent. At the moment the gains and losses hinge on the Fed speculation over tapering and the impacts from releases of several not-so-significant-data.
• Domestically, earnings season will be stealing the market attention in the absence of key global issues and data.

Mixed Picture

• Industrial production rose 0.6% MoM in September, beating the consensus of 0.4% gains while capacity utilization was reported at 78.3%, best since July 2008 and exceeded forecasts of 78%.
• US pending home sales slumped 5.6% in September however, the lowest since December, trailing consensus of 0.5% increase.
• US Federal Reserve is also bound to conclude its meeting on Wednesday. No change is expected.

Technically Speaking...

• JCI remained subdued as there has been lack of significant catalysts around. The index however, resilient above its daily and weekly EMA bands.
• Recent high at 4,611 will act as near-term resistance, followed by 4,791 and 4,900 while the nearest support will be at the upper end of the EMA band at 4,550, followed by recent low at 4,499. 
• Daily indicators hinted at exhaustion as volume slipped along with declining MACD and RSI. On the weekly basis however, the volume has started to tick up, while MACD’s ascend accelerated. Overall, the outlook for the coming week is cautiously positive.
• No changes in the pool of recommendations for now. All are on hold.

Day Ahead

Mixed US data continued to suppress the odds that the FOMC will deliver something new this mid-week at the end of the Fed’s regular meeting. US Producer Price Index will feature in Tuesday’s session in New York alongside retail sales figure. Sales data expected to see no change in September, but ex-auto and gas the data is seen to have gained 0.4%.

Click here to download the full update (PDF)

Morning Dew - October 28th 2013

Key Points

Doldrums

• Market continues to move back and forth between gains and losses as fresh catalysts remain absent. At the moment the gains and losses hinge on the Fed speculation over tapering and the impacts from releases of several not-so-significant-data.
• Domestically, earnings season will be stealing the market attention in the absence of key global issues and data.

Confidence Slipped in October

• Consumer confidence fell in October from 77.5 to 73.2, a 10-month low, below the consensus of 75 and lower than its preliminary reading of 75.2.
• US durable goods orders climbed 3.7% in September, beating the consensus of a 2.3% rise and way faster than prior month’s slight gains of 0.2%. Excluding transportation items however, the orders fell 0.1%, better than prior period’s decline of 0.4% but sharply below the expected rise of 0.5%.

Technically Speaking...

• Despite declining on Friday, JCI managed to eke out an 0.8% gains throughout the week. The index however, remains resilient above its daily and weekly EMA bands.
• Recent high at 4,609 will act as near-term resistance, followed by 4,791 and 4,900 while the nearest support will be at the upper end of the EMA band at 4,550, followed by recent low at 4,499. 
• Daily indicators hinted at exhaustion as volume slipped along with declining MACD and RSI. On the weekly basis however, the volume has started to tick up, while MACD’s ascend accelerated. Overall, the outlook for the coming week is cautiously positive.
• No changes in the pool of recommendations for now. All are on hold.

Week Ahead

Falling consumer confidence added more relief on the investors’ mind that the Fed will not taper the stimulus soon. Technically, JCI remains positive, but as positive catalysts look limited, the climb will be a grind rather than a rally. Earnings season domestic and overseas will also continue to feature in the coming week.

Click here to download the full update (PDF)

Morning Dew - October 25th 2013

Key Points

Doldrums

• Market continues to move back and forth between gains and losses as fresh catalysts remain absent. At the moment the gains and losses hinge on the Fed speculation over tapering and the impacts from releases of several not-so-significant-data.
• Domestically, earnings season will be stealing the market attention in the absence of key global issues and data.

Manufacturing Slowed

• US jobless claims came in more than expected at 350k for the week ending Oct 18, while the prior week reading has been revised down to 362k.
• US Preliminary PMI for October was down from 52.8 to 51.1, below consensus of 52.5, contrasting to China’s piece that came in at 50.9, better than the expected 50.4 and up from 50.2.
• Friday will see the US durable goods data for September released. Consensus sees 2% increase after a small 0.1% gains in prior month.

Technically Speaking...

• There is no change in view as the index remains stuck near its EMA support around 4,550.
• Prior high at 4,609 will act as near-term resistance, followed by 4,791 and 4,900 while the nearest support will be at the upper end of the EMA band at 4,550.
• MACD has started to edge higher again, while volume ticked up. Still no significant signal coming from RSI. 
• No changes in the pool of recommendations for now. All are on hold.

Day Ahead

As the market is running out of major catalysts, the sessions ahead will be more likely going sideways. US earnings season continues to be around along with speculation over the start of Fed’s tapering.

Click here to download the full update (PDF)

Morning Dew - October 24th 2013

Key Points

Doldrums

• JCI bounced back after it got under fire a day earlier. The bounce could be a part of a large consolidation currently happening as the market is waiting for the next big things such as the FOMC decision, and more rounds of of economic data.
• Next incoming data are from the housing market and the job market. US New Home Sales were expected to gain 1% in September from prior month, compared to MoM jump of 7.9% recorded in August. US jobless claims data is also set for release on Thursday.
• Beyond Thursday, Friday will feature durable goods orders, as well the U. of Michigan confidence index.

UNVR Not Going Private

• UNVR soared to reach as high as 37,350 on Wednesday after a rumor about the company planning to go private hit the market.
• The company clarified the matter as it stated that it is its subsidiary company, Unilever Body Care which was previously listed (PROD) which is going to go private.
• At the end of the day, UNVR settled at 31,700, trimmed its gains to just 2.92%.

Technically Speaking...

• JCI made another push above its EMA resistance and managed to hit 4,609  only to get pushed back to end at 4,546. The candle pattern shows exhaustion and it risks for another attempt to go down. 
• Prior high at 4,609 will act as near-term resistance, followed by 4,791 and 4,900 while the nearest support will be at the upper end of the EMA band at 4,530.
• Indicators show no new hints at the moment. 
• No changes in the pool of recommendations for now. All are on hold.

Day Ahead

As the market is running out of major catalysts, the sessions ahead will be more likely going sideways. US earnings season continues to be around along with speculation over the start of Fed’s tapering.

Click here to download the full update (PDF)

Morning Dew - October 23rd 2013

Key Points

Short on Expectations

• Payrolls came short of expectations in September. After an August gains of 193k, September saw only 148k gains in payrolls. Unemployment rate was at 7.2%, which is best reading since November 2008. Payrolls number trailed the consensus of 180k.
• Less than expected payrolls number turned out to be supporting stocks as the Federal Reserve will have to wait for firmer string of data. 
• The next release of payrolls data has been pushed back to Nov 8 from the originally scheduled Nov 1 as a result of recent shutdown. Meanwhile, the FOMC will hold its meeting on Oct 29-30, but the market is now factoring in Fed’s tapering to start on March 18-19 next year instead.

US Earnings Update

• So far, 138 companies have reported an average growth of 5.5% in earnings while sales have been reported growing by 2.3%.
• Of these companies, 72% managed to beat consensus  in terms of profit while 54% have beaten sales estimates.
• While the Dow claws its way up, the wider S&P 500 index is closing in to its best annual gain in a decade to 1,754.67 (+0.6%).

Technically Speaking...

• JCI slipped back to end inside the EMA band on Tuesday, hitting the intraday low at 4,499.  The index was nowhere near its Monday’s high at 4,585, hence putting its move towards 4,791 (Sept. high) en route to 4,900 on hold for now.
• Prior high at 4,585 remains as resistance, followed by 4,791 and 4,900 while the nearest support will be at the lower end of the EMA band at 4,444.
• Indicators took a u-turn as volume slipped, MACD ticked down while RSI turned lower after it approached 70% area earlier, the area considered to be overbought. 
• ADHI and ROTI were filled, which means now there are seven active recos.

Day Ahead

Less impressive NFP figure turned to be a positive catalyst as the FOMC will have to wait for more convincing string of jobs data before considering to start removing its stimulus. JCI is expected to bounce off its yesterday’s low this Wednesday. 

Click here to download the full update (PDF)