Market Gazer Hong Kong - Japan - Germany - UK - North America
market review : europe & us
American consumer are not dead yet. At
least, that was what Tuesday’s retail data
indicated, boosting the market sentiment
but yet unable to push Dow higher. The
Dow Jones Industrial Average ended at
10,526.49, down 17.64 points or 0.17%
while S&P 500 index also fell 0.80 points
or 0.07% to 1,121.10. Tech stocks gained
however, as Nasdaq Composite advanced
0.18% or 4.06 points to end at 2,289.77. In
Europe, DAX index ended 0.22% higher at
6,275.41 as poor ZEW index was offset by
better-than-expected retail data from the
US. FTSE 100 index barely changed as it
added 1.88 points or 0.03% to end at
5,567.41.
Michael Meister, the deputy chairman
and finance spokesman for Angela
Merkel’s party warned Portugal that the
country must do more to improve the
economy, particularly by investing more in
education and technologies. Earlier
Portugal finance minister said that the
country would not need to request special
rescue program because Portugal have
already financed nearly 90% of its needs
for the entire 2010. The criticisms over
Portugal came after last week’s yield
spread between 10-year bonds of
Portugal and Germany soared to 372 basis
points. Currently the spread was at 335
basis points.
German ZEW Index fell in September to -
4.3 from 14 in August, way below the
forecast of 10. The fall was the fifth
consecutive decline and was the lowest
14 September 2010
level since February 2009. The current
conditions index rose to 59.9 from 44.3 in
August. Eurozone’s current economic
condition index also rose, from -13.0 in
August to -6.3 in September. For
economic expectations, Eurozone’s index
worsened from 15.8 to 4.4.
Source: Center for European Economic Research
Industrial production in Eurozone was
unchanged in July, below the economists
expectations of a rise of 0.1%. In June,
production fell 0.2%. Year-on-year, the
output slowed to 7.1% in July from 8.3%
in June. This was also below the
consensus of 8.0%.
UK Consumer Price Index rose 3.1% in
August from the same period last year.
The figure was above the consensus of 3%
and at par with July’s year-on-year
reading. Core inflation gathered pace
from 2.6% rise in July to 2.8% in August.
This was also beyond the expected gains
of 2.5%. Meanwhile, retail price index was
at 4.7% in August, slightly below the July’s
reading of 4.8%, but also beat the
expectations of 4.6% increase. Excluding
mortgage interest payments, the RPI also
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 Market Gazer
slowed to 4.7% from 4.8% during the
same period. Month-on-month, the CPI
reversed course from falling 0.2% in July
to a rise of 0.5% in August. RPI’s month-
on-month reading also showed a
turnaround from a fall of 0.2% to a rise of
0.4% in August. The stubbornly high
inflation will at least keep the interest
rates unchanged throughout 2010, and
possibly throughout most of 2011 when
the new retail tax plan is to be applied.
Source: Office for National Statistics
Elsewhere, the Nationwide Building
Society reported that UK’s consumer
confidence advanced to 61 in August from
56 in July, beating the consensus of 60.
The expectations index also rose to 84
from 77. Another data reported on
Tuesday was RICS House Price Balance for
August which dropped 32%, faster than
the July’s drop of 8%. The data was worse
than the consensus of a 12% drop.
Across the Atlantic, the US
retail sales edged up 0.4% in
August, beating the
expectations of a 0.3% gains.
July’s reading was also show a 0.3%
increase. Excluding autos, sales were 0.6%
14 September 2010
Hong Kong - Japan - Germany - UK - North America
higher in August, while the core sales
which excludes autos and gasoline, rose
0.5% after a 0.1% fall in July. Business
inventories was also rising in July. The 1%
rise in inventories beat the consensus rise
of 0.7% and was also faster than the
June’s rise of 0.5%. A better-than-
expected retail figures would at least
improve the investors’ sentiment over the
state of the US economy, especially in
consumption.
JP Morgan Chase & Co.’s CEO Jamie
Dimon said on Tuesday that the Basel III
rules announced last weekend were to
push banks to seek more financing from
non-bank financial institutions as well as
increasing bank loan prices for customers.
Shares of US banks fell on Tuesday,
reducing the positive impact from the
sales data released earlier. Bank of
America fell 1.94% to $13.68, Citigroup
settled at $3.94 or 1.25% lower, Goldman
Sachs also shed 1.19% to $152.53, and JP
Morgan itself fell 0.97% to $40.72.
Cisco Systems CEO John
Chambers announced that the
company would issue its first
dividend this fiscal year, despite the
stock’s poor performance this year. The
dividend yield would be around 1% to 2%,
according to Chambers. At the end of July,
Cisco held nearly $40 billion in cash and
short-term investments. Chambers also
added that he planned to repatriate at
least $30 billion of Cisco’s cash abroad
back to US and use it to increase the
workforce by 10% in 2011. Cisco ended
the day up 0.89% to $21.45.
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 Market Gazer Hong Kong - Japan - Germany - UK - North America

stagnant at 7.8% in the three months

Google bought Quiksee, a start-up
company from Israel which developed
platform to allow people to make videos
based on location. The technology is seen
to be able to complement Google Maps
and also to compete with Facebook as it
could allow people to geotag photos,
adding more attractions on Google Maps.
Google settled 0.38% lower at $480.43.
Adobe Systems was put on
HOLD from BUY at Standpoint
Research. The shares however,
rose 0.73% to $32.47.
Exxon Mobil was downgraded again from
OUTPERFORM to SECTOR PERFORM by
RBC Capital. The price target was also
lowered to $70 from $76. The stock
inched up 0.02% to $61.01.
ending July. Jobless claims change in
August is seen improving from -3.8K in
July to -3.0K. Average weekly earnings
including bonus throughout the three
months ending July is seen accelerating to
1.7% from 1.3%.
Eurozone data will cover CPI for August,
forecast at 1.6% (y/y) and 0.2% (m/m).
The year-on-year core index is seen
slowing from 1% to 0.9% in August.
Disclaimer: This report is provided for information purposes
only. It is not an offer to sell or to buy any securities. This
report has been prepared based on sources believed to be
reliable, but there is no assurance or guarantee regarding its
completeness & and accuracy. The author accepts no
responsibility or liability arising from any use of the report.

wednesday preview 

Wednesday will feature US Industrial

Production data for August. The figure is
seen slowing from 1% rise in July to a rise
of 0.2%. The accompanying capacity
utilization rate is seen inching higher to
75% from 74.8% in July. Other data will
include Empire Manufacturing for
September, seen up from 7.10 in August
to 8.00; and US August import price index
seen to slow towards 3.8% from 4.9% in
July.

European data will consist of UK

employment data, with claimant count
rate seen unchanged at 4.5% in August,
while ILO unemployment rate is also seen

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14 September 2010 Page 3