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Asia morning update

A mixture of the support from US earnings coupled with the worries circling growth look set to keep prices in a gridlock for Asia markets.

Corporate earnings delight to sustain?

Wall Street marched on with earnings powering the run in Wednesday’s session. This comes as better than expected results from Goldman Sachs and Bank of America prompted further gains for the financial sector, aiding it to become the flag bearer for gains overnight. The said sector rose 2.2% in the Wednesday session on the S&P 500 index with attention shifting to the likes of Morgan Stanley today with hopes for more sugar rush for prices. Watch the financial sector ETF (XLF) approaching the $26 handle.

As the departure from the downtrend slowly establishes, one would question the motivation for further upward momentum here. Evidently the bulk of earnings have yet to be released, particularly from the tech giants that could form the biggest wave for prices into the month’s end. While US-China trade talks carry on, growth indicators sputter across the globe calling for assistance from central bankers and policymakers alike.

However, as far as sentiment has suggested, the improvement had been evident as one examine the S&P 500 index’s put-call ratio showing the significant reduction in the interest for downside protection. Bullish bets had also piled in for a second week as of last week’s CFTC report. What we may be seeing, though, remains the recovery from the overtly bearish sentiment into end-2018. To continue from here would likely still require the delicate balance of supportive policy, reduced political disruption and stabilized growth situation – something we may be seeing a semblance of at present.

Asia markets

Amid the lack of strong leads, Asia markets look once again set to idle in anticipation for inspirations. Notably, this morning’s non-oil domestic exports (NODX) release from Singapore saw a significant miss with the headline reading showing a year-on-year decline by 8.5% against the expectation for a 1.5% growth. This marks the second consecutive week of decline for the NODX figure, weighed in part by the electronic and pharmaceuticals sectors. Following the Chinese data disappointment, the miss here had yielded little response with USD/SGD unchanged around $1.3545 when last checked.

Yesterday: S&P 500 +0.22%; DJIA +0.59%; DAX +0.36%; FTSE -0.47%


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