• US stock market, economy and companies update (September 21, 2015)

    US stocks are seeing good gains this morning with broad strength seen across all sectors. The 10-year benchmark UST is up 5.5 basis points to 2.189%. As of writing, the DJIA is up 0.78%, the S&P500 is up 0.98% and the Nasdaq is up 0.53%.

    Fed hawks Bullard and Lacker were out over the weekend condemning the FOMC's decision to leave rates on hold last week. Bullard said there was a good chance of an October hike, given that last week's decision was a close call. Lacker, a dissenter at last week's decision, warned that further delay of liftoff would be a departure from past Fed behavior. Dove Williams again argued that a little more patience was needed before raising rates. The dollar continues to rebound after bottoming out early on Friday. EUR/USD touched 1.1460 at its highest point on Friday but the snapback has been sustained since then, with the pair dropping nearly three big figures to 1.1180. USD/JPY was testing 120.70 earlier today but has seen resistance around that level.

    August US existing home sales declined to an annualized rate of 5.31 million units from the July rate of 5.58 million, missing expectations. The national median home price fell slightly to its lowest level in a year, although analysts noted there was has been a notable surge in pricing in the West, where home prices are up more than 7% y/y. The NAR cited tighter inventories for the slight decline in sales. Homebuilder Lennar beat expectations in its third-quarter report, and reiterated that the US housing market continues to improve in a slow and steady manner. LEN is up 2% on the day.

    The latest sales data from Caterpillar show no signs of recovery. Retail sales of Cat machinery in the three months through August were down 11% from a year earlier, matching the decline in the three months ended July 31. Latin America and Asia were especially weak, while North America was down 5% and Europe flat. Sales of engines were down 21% in the latest three months, compared with a 14% decline in the three months through July.

    There has been a flood of corporate debt issuance this morning and analysts are predicting up to $30 billion of investment-grade debt could be on off this week, after a mere $10 billion was sold last week. The Fed's decision to hold rates steady last week have opened a window of opportunity for companies looking to raise funds while rates remain ultralow. Also note there has been a surge in equity issuance as well.

    There has been at least one big merger deal announced this morning. Atmel agreed to be acquired by Dialog Semiconductor for $4.6B in cash and stock. Atmel holders will receive $4.65/shr in cash and 0.112 Dialog ADSs. The London-based, Frankfurt-listed Dialog is acquiring its US rival to broaden its customer base. Dialog is heavily exposed to Apple and Samsung, and with Atmel the company will be able to expand its presence in the internet of things.

    Looking Ahead
    - 13:00 (US) Fed's Lockhart (moderate, voter) to speak in Atlanta
    - 14:00 (MX) Mexico Central Bank (Banxico) interest rate decision
    - 16:00 (US) Weekly Crop Condition Report
    - 20:30 (TW) Taiwan Aug Unemployment Rate: No est v 3.7% prior

    Economic Data
    - (IL) Israel July Manufacturing Production M/M: -3.4% v +3.7% prior
    - (BR) Brazil July Economic Activity Index (Monthly GDP) M/M: 0.0% v -0.3%e; Y/Y: -4.3% v -4.5%e
    - (CA) Canada July Wholesale Trade Sales M/M: 0.0% v 0.8%e
    - (BE) Belgium Sept Consumer Confidence Index: -10 v -6 prior
    - (US) Aug Existing Home Sales: 5.31M v 5.50Me

    [I]Contributed by Trade The News[/I]
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