Morning Meeting: Were Investors Selling in the Anticipation of Apple's Results?

Good Morning.

Yesterday's Closing Thoughts titled “Is something about to crush the tape?”  due to the fact that while we were writing the post the euro/$ extended its range on the downside,  European benchmarks gave up part or all of their daily gains, in US: equity indexes turned upside down just to recover the green before the close, in the commodity arena Gold rose higher while the Oil turned negative. All these details made us thinking that something was about to crush the tape.

Where investors selling in the anticipation of Apple's results?

If this is the reason then they were forward looking as the world's largest company by market value, announced yesterday forecasts on earnings that fell short of projections for the crucial holiday quarter. To add pressure on Asian benchmarks: China Unicom, the country's No. 2 mobile-phone carrier, was among 60 percent of companies on the Asia-Pacific gauge whose earnings have missed estimates.

Let's look at the bright spot: Samsung Electronics, Apple first rival, reported ecord quarterly profits for a fourth straight quarter and Bank of China Ltd posted its biggest quarterly profit gain in a year the day before, but they failed to restore investor concerns, although they were followed by a 422.6 billion yen Japanese economic stimulus package of subsidies on tax grants in a move to fend off recession as the recovery in the world's third biggest economy falters. The emergency spending package was double the size originally expected.

An hour before the European opening bell: Japan's Nikkei Stock Average traded 0.91% lower to 8,973.20, South Korea's Kospi declined 1.52% to 1,895.31. Hong Kong's Hang Seng Index slipped 0.77% to 21,642.85 while the Shanghai Composite Index lost 1.66% to 2,066.71.

From the macroeconomic stand point of view: South Korea's economy grew by 0.2 percent in the July-September period from the previous three-month period, the slowest quarterly growth since the fourth quarter of 2009 in Asia's fourth-largest economy. Reuters survey called for a 0.1 percent expansion, signaling that shrinking global demand mainly sparkled by the Eurozone crisis has hit hard Asian exporters. Japan's core consumer prices fell for the fifth straight month in the year to September, keeping pressure on the BOJ to do more to achieve its inflation target.

Currency wise the dollar eased 0.32% versus the yen to 80.05 after hitting a fresh four month high of 80.28 yen early in the Asian trading session.The euro was down 0.2 percent to 103.75 yen and the Australian dollar eased 0.3 percent to 82.90 yen, versus the greenback the common currency traded flat at 1.2935$, not far from a near two week low around $1.2921 seen on Wednesday.

The dollar move was unable to counterbalance the selling pressure on dollar denominated commodities: the yellow metal lost 0.45% to 1,705.30$ an ounce while the Oil (WTI) nosedived 1.08% to 85.12$ a barrel.

The focus now switches to the advanced reading of US third-quarter  GDP due later in the day,with the annualized rate of growth in the world's largest economy seen at 1.9 percent, up from 1.3 percent in April-June. By the way it's worth keeping an eye open on European member states' consumer confidence to get the pulse of the euro-affair.

But the question remains un-answered why we had that down-move in the last hour of the Europan cash session?

Have a nice day.

Originally posted at www.77sigmatrading.com