a check of the selling pressure indicators reaffirms the notion that there is no major selloff immediately in sight as those indicators moved sideways. It appears the shallow-dip, stronger-surge phenomenon is one good catalyst away from rallying the major market indices; the DJIA up to 14,000 and the S&P500 index to 1,500 by Election Day, as previously forecasted.
The upcoming week closes the door on September and the third quarter, also raising worries that the upcoming quarter’s profit showings, launching in mid-October with Alcoa’s (NYSE:AA) traditional kick-off, are most likely to surprise on the downside, as last week’s warnings from FedEx (NYSE:FDX) and 3M (NYSE:MMM) foretold. According to Reuters’ data, Wall Street anticipates third quarter profit declines of 2.2% from a year ago, the first drop in three years. Corporate guidance for the quarter is running the most negative since the third quarter of 2001, at a 4.3 to 1 ratio.
This morning’s trade shows mixed action in Asian shares, where China’s Beige Book revealed PBOC easing actions have so far resulted in limited economic impact on the mainland economy, matching the recent run of negative data. However, the Shanghai Composite was 0.3% higher on the session, and the South Korean Kospi gained 0.1%. Japan’s Nikkei lost 0.5% as the yen continued its rise, up 0.2% against the US dollar at 78.050, hurting exporters’ shares. A broad selloff in natural resources weighed on Australia’s S&P/ASX 200, driving the index 0.5% lower as well. Hong Kong’s Hang Seng dropped 0.2% on the day.