Daily Market Summary & Analysis, SEPT 10, 2010
September 10, 2010
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Today Asian markets closed mixed. The Shanghai Composite Index up +0.26% to 2,663.21; the Shanghai 180 A share index down -0.06% to 6,150.68; Taiwanese market TWSE, up +0.70% to 7,890.11; Hong Kong Hang Seng, up +0.43% to 21,257.39; Singapore STI up +0.36% to 3,022.28; Nikkei down up +1.55% to 9,239.14; South Korea, the Kospi up +1.02% to 1,802.58; Australia (the S&P/ASX 200) down -0.48% to 4,560.25; and India market, the S&P/CNX 500 up +0.42% to 4,740.35.
Spotlight came from Japan as its government annouced a GDP upward revision to 1.5% y/y, this is way better than the August data reported at 0.4%. It’s important to note, on August 27th, 2010 Japanese Finance Minister Yoshihido Noda issued the strongest language to date in regard to currency intervention. The government has recognized that a stronger yen is not in the best interest of Japan. Currency invervention is critical for Japan economic recovery as it will strengthen Japanese exporter sector. Today the yen has weakened against the dollar, leading Japanese exporters stocks to climb much higher. In addition to that, chatters among trading desks also gave credits to the U.S. better than expected macroeconomic data from the Labor Department yesterday. U.S inspiring macroeconomic data surely also give Asian investors hope for worldwide economic recovery.
At 11AM EST President Obama continued his speech on economy. “Economic recovery has been painfully show. Policies of previous decade has made us weak. And we believe in tax cuts for companies that create jobs units. And I urges the Senate to pass small business tax Bill. Middle class families need tax reliefs now, and let’s give 95% permanent tax relief for those who made under $250,000. We believe in tax cutting for the middle class and not for the super rich. We can discuss tax cuts for the rich later,” the President clearly explained the proposed second stimulus for growth and additional jobs for economy.
Right after the President’s speech, Wall Street fund managers also shared their views on economy and the market. Michael Holland, chairman at Holland & Company, explained the low trading volume in Wall Street, citing people are not going toward risks right now. However, debt crisis in Europe is slowly dying; he likes investments in Taiwan, China, companies with international exposures, and technology. Ned Riley, CEO of Rilet Asset Management shared his similar view. He is not too concerned about European debts issues. “The market is bottoming and will head higher. We will be in the bull market for the next four years. I liked technology, pharmaceutical and biotech,” said Riley. Art Hogan, Managing Director at Jefferies agreed. “Everyone is talking about a double-dip. But Corporates are sitting on a pile of cash; there won’t be a double dip,” said Hogan. Brent Wilsey, president of Wilsey Asset Management, likes undervalued companies that have no debt on the balance sheet, growing sales, and trading with less than 10X earnings.
With light trading volume, U.S. equities enjoyed the best September since 1998, up 7 out of 8 sessions. All major indexes closed near the high of the sessions; the DOW up +0.46% to 10,462.77; Nasdaq up +0.28% to 2,242.48; the S&P 500 up +0.49% to 1,109.55. It’s critical for the S&P 500 to go above the 200d-MA at 1115.60; next resistance are 1120 and June high at 1131.33. Support levels now are the 1,100, 50d-MA at 1085.51, and the 20d-MA at 1077.83. Next week, traders should watch these levels very closely. Let’s see… the bulls or the bears, who will have the upper hand at these critical levels?
Best regard to all, and good luck in your trading
Disclosure: No positions in stocked mentioned right at the moment