For those of us of a certain vintage, today is the 22nd anniversary of Black Monday, when our first fling with computerised trading ended in tears! But that was then and the market has no memory, so fast forward to a week when approximately 25% of the S&P 500 rare slated to report. So far this season, top-line numbers have been encouraging risk appetite: Of the companies which have reported, two thirds are beating on revenues. Last quarter, only 40% of the S&P outperformed on revenues.
Stocks to watch this afternoon include publisher Gannett, who ESP beat the Street by 3c, Eaton Corp who beat estimates and raised guidance and fertilizer maker Potash on some chit chat from Bank of America that BHP Billiton may be interested in bidding at a 30% premium to the current share price. To the downside will be financial BB&T, who had a 2c miss and Amgen after US regulators delayed approval for an important new drug.
The big CNBC buzz today surrounds legendary investor Carl Icahn and his offer to underwrite a $6bn loan to much troubled commercial lender CIT. The stock is up 10%. Airlines may be active after JP Morgan made AirTran an "overweight", upping price target to $11 from $9.50 while downgrading Southwest to "underweight" and slashing their price target to $6.50 from $11.50 (ouch)
But perhaps the important equity related news comes after the bell tonight when Apple ($1.42), Boston Scientific ($0.41) and Texas Instruments ($0.39) all report.
A Big Week For Chinese Data
Very important data including Q3 GDP, inflation and industrial production are due from China this week. The strong rebound in activity in emerging Asia attracted the market's attention during the summer, as it focussed on the shape and pace of the nascent recovery. In July, preliminary estimates of Q2 GDP for Singapore and Korea (an annualised 20% for the former and 9.7% for the latter) showed that the region was in recovery mode and that growth dynamics were stronger than in the developed world, thanks to the resumption of the global trade cycle, strong policy support and much healthier internal demand.
China in particular came under intense scrutiny as its robust growth is considered an important element for the sustainability of the global recovery. For example, in late July, fears that authorities could put the brake on robust Chinese growth by imposing tighter bank lending saw the Chinese equity market fall by about 5%.
