Wednesday, October 2, 2013

Morning Memo: Wednesday, October 2, 2013

"Morning Memo" begins below this "NOTE for  NEWCOMERS" to "Morning Memo"...... Each morning, we post a short bullet-point list of noteworthy events, data, etc that find their way into the assessment of global markets.  It's far from complete and is not meant to be an exhaustive reconciliation of all things that could possibly impact stocks, bonds, currencies and commodities!  Rather, it's best viewed as a cryptic memo of "highlights", noteworthy items that took place in Asia, European and US hours.....and color-coded 'Red' for seemingly negative impact on equity markets, 'Green' for positive.
This will also serve as a useful review mechanism, as scrolling through the series of "Morning Memo" posts over time ought to summarily highlight what generally drove price action.  

We hope you find this useful and informative....and as always, that you'll share feedback!!

5:00am ET...
  • mostly lower following yesterday's up-trade in the US. Concern about US shutdown prevails as does the October 17 debt ceiling deadline.
  • Some Asia Emerging Markets traded higher on the thought that a US shutdown would imply a continuation of Fed easy-money policy for some time and would delay tapering.
  • closed for holiday.
  • Japan...PM Abe did announce the consumption tax hike as expected, along w/further stimulus measures.  Nikkei fell over 2%, seemingly a 'sell on the news' event.  (Editorial note:  the markets have appeared to price in all the good news that Abe-nomics could possibly deliver, and as a result, asymmetric return outlook is possible:  down on disappointment if the policies fail, down on profit-taking if the policies succeed, but much of the 'up' already priced in.)
  • Europe....broadly lower ahead of today's ECB meeting and following Asia's declines and attention to the US shutdown.  Also on the heels of yesterday's announcement by Unilever (UN) that weakness in Emerging Markets currencies would weigh on earnings in coming quarters.  Given UN's size in the consumer products space and in EM countries, this was seen as having broader, market-wide implications.  EM currencies, that had been battered since 'tapering' talk began, did recover some after the Fed's recent decision to hold off on tapering.  But that rally has faded.  (See FT article EM Currencies Give Up Post Fed Gains)
  • Italy...PM Letta called for a confidence vote on his gov't today.  Tensions remain high.
  • more later...
  • Later:
    • Italy...Letta wins confidence vote after Berlusconi, in a surprise move, decides to support the government!
    •  US..ADP jobs data misses expectations and prior month revised lower!
 Please continue to visit Soos Global Market Musings for updates.
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(Please note: This article is solely meant to be thought provoking and is not in any way meant to be personal investment advice. Each investor is obligated to opine and decide for themselves as to the appropriateness of anything said in this article to their unique financial profile, risk tolerances and portfolio goals).
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