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TradeTheNews.com US Market Update: Global Sell-Off on China Jitters
Mon, 22 Sep 2014 11:18 AM EST
- (US) Aug Chicago Fed Nat Activity Index: -0.21 v +0.33e
- (IL) Israel Central Bank leaves Base Rate unchanged at 0.25%, as expected
- (MX) Mexico Aug Unemployment Rate (unadj): 5.18% v 5.5% prior; Unemployment
Rate (adj): 4.87% v 4.80% prior
- (US) Aug Existing Home Sales: 5.05M v
- (EU) Euro Zone Sept Advance Consumer Confidence: -11.4 v -10.5e
Worries about China were festering as
the week began, with press articles circulating that Beijing may lower its 2015
growth targets and was unlikely to undertake any more major stimulus efforts.
Small caps and momentum stocks are getting hit hard (the Nasdaq and Russell
indices are big losers), the S&P500 is back below 2000 and metals are also
trading lower. As of writing the DJIA is down 0.39%, the S&P500 is down
0.71% and the Nasdaq is off a whopping 1.26%.
Multiple influential figures will be speaking throughout the day at a big
Bloomberg conference today. This
morning the focus was on the New York Fed's Dudley, who said that the Fed
should raise rates as soon as appropriate. Dudley said it would be nice to see
sufficient progress in the economy to start raising rates in 2015, and that
rates near zero was not a comfortable place for the Fed. Also at the
conference, hedge fund manager Julian Robertson was very bullish on Alibaba,
although the stock is down 3.5% currently, trading below its opening level on
ECB President Draghi is testifying before the European Parliament. Draghi reiterated that the Eurozone recovery
is losing momentum and that the ECB is ready to do more if necessary.
Addressing the problems with the TLTRO last Friday, Draghi said the take by
banks in the initial auction was well within the range expected by the ECB
and claimed the TLTRO program has already positively impacted lending. He also
said that the AQR stress tests may have constrained credit flows in the
eurozone. EUR/USD had been as high as 1.2865 in the European session but test
almost to 1.2821 during the US session.
Apple said that its first weekend of
iPhone 6 sales were above 10M units, compared to estimates ranging from 6.5
million to 10.0 million units. Note that a year ago, the first weekend
of iPhone 5 sales topped 9.0 million devices and included sales in China.
Today's numbers do not include China, where the model is still waiting for
approvals from regulators; analysts expect about 2.75 million units in initial
sales in China.
In the latest pharma consolidation deal, Germany-based Merck KGaA has agreed to acquire US firm Sigma-Aldrich for
$17 billion in cash to boost its lab supplies business. Merck will
acquire all of the outstanding shares for $140/shr, a 37% premium to Friday's
close. The deal helps Merck focus on supplying major pharmaceutical companies
and academic institutions with chemicals and services.
- 16:00 (US) Crop Condition Report
- 21:45 (CN) China HSBC Sept
Preliminary Manufacturing PMI: No est v 50.2 prior
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